The yuan hovered near a three-year high against the dollar Tuesday, buoyed by expectations of stronger US-China ties ahead of this week’s meeting between the countries’ leaders.
Goldman Sachs analysts said China’s currency remains more than 20% undervalued and will keep strengthening this year, and a summit that stabilizes trade ties could accelerate its climb.
An “intensifying currency war” is simmering between the two superpowers, The New York Times wrote, as Beijing eyes a larger international role for the yuan, while the US looks to defend the dollar’s position as the world’s reserve currency.
Washington has discussed currency swaps with Gulf and Asia partners in an effort to entrench dollar dominance, a strategy the US Treasury secretary said would strengthen “America’s economic shield.”
