Nov. 9 (UPI) -- China's currency rallied on Monday following Joe Biden's victory in the U.S. presidential election, as analysts said the election of the former vice president augurs an era of recovery in bilateral relations.
The Chinese yuan was 0.37% stronger at 6.5671 per U.S. dollar on Monday afternoon, Hong Kong time, following a 1.6% appreciation last week, the greatest increase since January 2017, Bloomberg reported.
The yuan's surge began in June, as the Chinese economy began to show early signs of recovery from the COVID-19 pandemic. Foreign investors began to turn their attention to the world's second-biggest economy for higher rates of return. Overseas traders added about $3 billion into Chinese shares on Monday alone, according to Bloomberg data.
The yuan's appreciation comes as shares soared on stock markets in Asia. Both the Shanghai Composite Index and the Hang Seng in Hong Kong registered increases of more than 1% on Monday.
The election of Biden has been interpreted in financial markets as the removal of uncertainties for China, which has been locked in a heated dispute over trade and COVID-19 with the Trump administration. Beijing maintained silence about Biden's victory, but Chinese analysts, including Jin Canrong, associate dean of the School of International Studies at the Renmin University of China, said the president-elect is likely to be "more moderate and mature in handling foreign affairs" than his predecessor, according to the Global Times.
Gao Qi, analyst with Scotiabank in Singapore, said the weak dollar has contributed to the yuan's rise, but China's central bank could issue a warning against "one-sided movement," according to Bloomberg.
Chinese intervention in the currency market has declined after a significant devaluation five years ago. A devalued yuan helps boost Chinese exports.
China remains wary of the coronavirus despite reopening its economy earlier this year. China Central Television reported Monday authorities are ordering mandatory disinfection of imported frozen foods after imported foods tested positive for traces of the coronavirus.