The renminbi has reached a one-year high against the greenback, with brokerages saying that the strength of the Chinese currency may survive a Biden presidency in November.

On Tuesday, the Chinese currency hit its highest since May 2019 in both the onshore and offshore markets, after topping 6.9 per dollar for the first time after more than one year.

The onshore renminbi opened trading at 6.8222 per dollar and increased 139 basis points. Both the onshore and offshore renminbi broke the 6.8 per dollar mark, with the onshore value jumping 460 basis points to 6.7730 as the market closed. The offshore renminbi once reached 6.7710, but had declined to 6.7757 by 6 p.m. Meanwhile, the U.S. dollar index fell below 93; the latest figure was 92.89.

Every HK$100 amounts to 87.5 yuan.

The Chinese central bank, People’s Bank of China, said that the foreign exchange account had 21.16 trillion yuan (US$3.1 trillion) at the end of August, a monthly drop of 3.825 billion yuan, marking the seventh consecutive month of decline.

Nomura said in a report that the United States-China relations were expected to ease if Joe Biden was elected president, and the offshore renminbi might further rise to 6.65 by the end of this year.

Citi said the renminbi would continue to gain strength, given a more rapid economic recovery than other major economies from the coronavirus outbreak, an improved balance of payment and inflows into the capital market.

“The improved market risk sentiment and a weak U.S. dollar have supported a further rebound of the renminbi,” said Carie Li, an economist at the OCBC Wing Hang Bank. Further appreciation of the currency was expected due to a heightened foreign interest in Chinese assets, she added.

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