Core Insights - China's onshore yuan has appreciated 5% against the dollar since early April, closing at 7.0066 per dollar, marking its strongest level since May 2023 [1][2] - Analysts estimate that over $1 trillion in corporate dollars held offshore could flow back to China, driven by exporters converting dollar revenues into yuan [2] - The strengthening yuan is supported by signs of economic recovery in China and a shift in U.S. Federal Reserve policy, creating a self-reinforcing cycle [3][4] Group 1: Currency Dynamics - The rally in the yuan is attributed to Chinese exporters converting dollar revenues into yuan before year-end, indicating a significant shift in currency dynamics [2] - The reversal of headwinds that previously pressured the yuan, such as trade tensions and capital flight, is now creating favorable conditions for its appreciation [4] Group 2: Bitcoin Market Response - A weakening dollar typically supports Bitcoin prices, as dollar-denominated assets become cheaper; however, Bitcoin remains stuck in the $85,000-$90,000 range despite favorable macro conditions [5] - Factors limiting Bitcoin's response include thin year-end liquidity, negative institutional flows with over $825 million in net outflows from U.S. spot Bitcoin ETFs, and uncertainty from the Bank of Japan's recent rate hike [6][7] Group 3: Future Outlook - Analysts suggest that the bullish case for Bitcoin is not dead but delayed, with expectations of further dollar weakening in 2026 if U.S. monetary easing exceeds current market expectations [8]

10 December 2025 | 8:40AM EST Economics Research Global Markets Daily: FX Vulnerabilities to China's Overcapacity Exhibit 1: The Yuan has grown increasingly undervalued since 2022 and is now about 20% undervalued versus GSDEER Isabella Rosenberg +1(212)357-7628 | isabella.rosenberg@gs.com Goldman Sachs & Co. LLC c45a43530f604d12bcb9a82b5aa6b9f6 n Resilient Chinese growth should lead to a stronger Yuan, but the global impact of overcapacity and increased trade competition could have negative spillovers to ot ...

MOSCOW (Reuters) -Here is a look at how U.S. sanctions on Russian oil firms Rosneft and Lukoil, which take effect at 1701 GMT on Friday, may affect the Russian foreign currency market. Ahead of the deadline, the rouble was strengthening on reports about a U.S.-drafted plan to end the war in Ukraine,​ which if implemented, could mean the sanctions are cancelled. WHAT HAS BEEN HAPPENING ON RUSSIA'S FOREX MARKET? The market was hit last year by sanctions on Russia's main operator, the ‌Moscow Exchange (MOE ...

Core Insights - Chinese banks facilitated the offloading of foreign currencies at the highest rate since 2020, with a net sale of $51.8 billion in September, indicating growing optimism for yuan appreciation [1][2][3] Group 1: Currency Conversion and Trade - The data reflects a bullish sentiment towards the yuan, as it reached its strongest level since November, with increased foreign exchange conversions by local exporters potentially supporting the yuan amid trade tensions with the US [2][3] - There was a notable increase in currency conversions related to goods trade, driven by robust export growth in September, which helped counterbalance outflows from securities investments [3][4] Group 2: Future Expectations and Policy Influence - Analysts predict that if the yuan continues to strengthen towards 7.00, Chinese exporters may convert hundreds of billions of dollars to the yuan, with the onshore yuan trading around 7.12 per dollar [4][5] - The People's Bank of China (PBOC) is promoting yuan strength by setting a stronger daily reference rate, which could lead to increased exporter conversion ratios and further yuan appreciation for the remainder of the year [5]

Core Insights - Chinese authorities are committed to promoting the yuan's global usage by facilitating its use for both onshore and overseas institutions [1][2] - The People's Bank of China (PBOC) aims to enhance the efficiency of cross-border trade and support the real economy through improved financial market access [2][5] - The international monetary system's diversification and rising demand for the yuan signal a favorable environment for its wider adoption [3][4] Group 1 - Beijing will support the yuan as a financing currency for foreign institutions and open up financial markets [2] - The report indicates a strategic push for internationalizing the yuan ahead of a significant Communist Party meeting [4] - China plans to enhance the transparency, standardization, and predictability of its financial markets to improve trading efficiency and liquidity [5] Group 2 - Recent policy measures include expanded access to China's bond repurchase market and a new payment system with Hong Kong [6] - The volume of capital flowing in and out of China for investment opportunities has surpassed the value of goods and services traded for the first time [6] - Despite these efforts, the yuan's global usage remains limited compared to the dollar and yen due to tight management by the PBOC [7]

Policy & Regulation - China is considering allowing Yuan-backed stablecoins [1] - This move aims to boost Yuan internationalization [1] Market Trend - China is starting to FOMO (Fear Of Missing Out) regarding stablecoins [1]