The yuan-dollar exchange rate swung wildly in the wake of the US presidential election, but ended on a 28-month high for the Chinese currency as Democratic candidate Joe Biden appeared to inch closer to victory.
The onshore yuan, which circulates in mainland China and is more tightly controlled than the offshore yuan market, ended the domestic trading session on Nov. 5 at 6.64 per dollar. Investor expectations of a less tumultuous trade relationship between China and the US helped boost the currency, also known as the reminbi, to its highest level against the dollar since July 2018.
While Biden has said he would make China “play by the international rules,” his comments and likely multilateral approach are very different from US president Donald Trump’s rhetoric and ongoing trade war against China. In September 2019, Trump slapped a 15% tariff on $112 billion of Chinese imports to the US, following an increase in tariffs on $200 billion in Chinese goods, from a rate of 10% to 25%, in May of that year.