Yuan Surges to 16-Month High Amid New Stimulus in China

China's yuan reached a 16-month high against the USD following new stimulus measures by its central bank, which included a cut in reserve requirement ratios for banks and eased mortgage repayments. This move contributed to a decline in the dollar index, which was further affected by weakening U.S. consumer confidence.

China's yuan climbed to a 16-month high against the U.S. dollar on Tuesday, following new stimulus measures announced by the central bank of the world's second-largest economy. These measures include a 50 basis point cut to banks' reserve requirement ratios and eased mortgage repayments for households.

This boost caused the yuan to strengthen by 0.65% against the greenback, reaching 7.017 per dollar. According to Marc Chandler, chief market strategist at Bannockburn Global Forex, Beijing's initiatives address key economic concerns, although underlying issues may persist.

Simultaneously, the dollar index dropped by 0.44%, influenced by a decline in U.S. consumer confidence. The euro and Australian dollar also gained against the dollar, each reflecting broader shifts in global monetary policy.

(With inputs from agencies.)