The Chinese yuan's onshore exchange rate against the US dollar rose sharply on Tuesday, closing at 6.8718 yuan, appreciating by 465 points from the previous trading day, reaching a new high since February 27. Market participants stated that the easing of geopolitical tensions led to a decline in the dollar, prompting a rebound in the yuan.
Traders mentioned that US President Trump's statement that the Iran war might "end soon" alleviated market risk aversion, previously putting pressure on the dollar index, and the yuan strengthened as global risk asset sentiment improved.
A foreign exchange trader from a Chinese bank indicated that the war would not end short-term, but the market already had expectations for stability in the situation, and the yuan's rebound was a normal market reaction, with an obvious improvement in overall sentiment.
In the offshore market, the latest offshore rate of the yuan against the dollar was reported at 6.8744 yuan, significantly stronger than the previous trading day's close of 6.8939 yuan.
The current spread between onshore and offshore yuan is about 12 points, indicating that the market trends in both places are basically consistent.
In the global foreign exchange market, the dollar remained stable overall against major currencies on Tuesday. Previously, comments by Trump regarding the Iran situation had briefly pressured the dollar, with market risk appetite returning.
