Yuan soared amid promises from China's leadership

The top leadership of China has promised to support the slowing economy, resulting in a sharp rise of the yuan.

Furthermore, Chinese state-owned banks are purchasing dollars to bolster the nation's currency.

The Australian dollar was bolstered by positive sentiment in China.

The usage of the yuan in Russia is reaching unprecedented heights of popularity.

On Tuesday, the Chinese yuan experienced a sharp rise following a pledge from the nation's top leadership to create policies to bolster the slowing economy, according to Prime.

The dollar dropped below 7.14 yuan as the yuan rose more than 0.5%, with investors responding positively to comments from a closely monitored Politburo meeting. Despite this, many are still expecting further information on stimulus measures.

Reuters and Bloomberg report that large Chinese state-owned banks are intervening to support the yuan, the national currency.

On Tuesday, the Chinese government declared its intention to provide increased political backing for the economy in the wake of the COVID-19 pandemic, and to maintain the yuan's exchange rate at a reasonable and balanced level. This announcement triggered the start of dollar selling.

HSBC stated that the Politburo mentioning currency stability in a statement for the first time in years implies that lessening the depreciation of the yuan could now be a more significant political goal.

Recently, China's monetary authorities have taken greater action to safeguard their weakening currency.

BCS reports that the yuan's popularity in Russia is continuing to increase. By the end of July, the CNY/RUB currency pair had already set its sixth consecutive monthly record in terms of market share. On July 24, the yuan accounted for 50.1% of turnover, the dollar for 35%, and the euro for 14.9%.

In February, for the first time ever, the yuan surpassed the dollar in terms of trading volume. There are numerous reasons for the yuan's continued popularity, such as the ongoing de-dollarization process, the growth of trade with China, the shift to settlements in national currencies, regular operations to buy/sell yuan under the budget rule, and the emergence of yuan-denominated bonds on the market.

Beginning August 1, the Central Bank of the Russian Federation will start to invest funds from the NWF in the foreign exchange market, which will be a new impetus for increased activity in the CNY/RUB pair.