The yuan jumped on Tuesday ahead of a COVID-19 press briefing in China later in the day that is spurring hopes of a potential easing in the country’s strict pandemic restrictions following an unprecedented episode of unrest.
The offshore yuan was nearly 0.9 percent stronger at 7.1832 per dollar after a statement from the country’s National Health Commission said its representatives and others from two agencies involved in disease control and prevention would speak at a COVID press briefing on Tuesday.
“People are getting quite excited about some sort of reopening,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
The US dollar, which rallied in the previous session on mounting worries over China’s COVID situation, pared some of its overnight gains and moved broadly lower.
The Aussie, often used as a liquid proxy for the yuan, rose 0.77 percent to $0.6704. The kiwi similarly gained 0.71 percent to $0.6204.
Sterling edged 0.36 percent higher to $1.2001.
Rising tensions in China over the country’s stringent pandemic measures sent investors flocking to the safe-haven dollar in the previous session, which triggered a slide of more than 1 percent in the antipodean currencies and sterling overnight.
Police on Monday stopped and searched people at the sites of weekend protests in Shanghai and Beijing, after crowds there and in other Chinese cities demonstrated against the country’s strict zero-COVID policy.
Protests have spread to at least a dozen cities around the world in a show of solidarity.
Elsewhere, the euro was up 0.38 percent at $1.03795, after surging to a five-month peak of $1.0497 overnight.
European Central Bank President Christine Lagarde said overnight that euro zone inflation had not peaked and it risked turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.
Flash euro zone inflation figures for November are due on Wednesday, with economists polled by Reuters expecting inflation to come in at 10.4 percent year-on-year. Ahead of that, inflation numbers from Spain and Germany are expected later on Tuesday.
