​EBC Markets Briefing | Yuan rises past 7; Brazil stocks buoyant after labour data

​The dollar held steady on Wednesday but was headed for its biggest annual drop since 2017 as interest rate cuts, fiscal worries and trade policies under Trump deter bulls in 2025.

Many of those worries are likely to remain in 2026, suggesting the dollar's dire performance could extend and underpin the behaviour of some of its rivals, including the Chinese yuan.

The yuan breached a major resistance of 7 per dollar. China has fixed the renminbi at its strongest level against the dollar in 15 months, a move that analysts say signals its tolerance of a stronger currency.

The Asian country said it would expand government spending and improve how it deploys capital in 2026, aiming to balance supporting growth and containing debt risks.

More stimulus is needed as a years-long property downturn, trade tensions and rapidly ageing population weigh on demand while the room for monetary easing is shrinking.

Experts are doubting the PBoC would allow an appreciation that would undermine its export powerhouse economy, given its 5 per cent GDP growth target.

The yuan was severely overbought, signalling significant downside potentials. We reiterate the view that it will likely ease to 7 per dollar in the upcoming sessions.

Asset recap

As of market close on 30 December, among EBC products, silver led gains. The metal surged after a sharp pullback from all-time peak, underling its resilience amid rising geopolitical tensions and energy transition.

Brazil's unemployment rate tumbled to a historic low, the latest sign the economy is holding up to hefty interest rates ahead of next year's presidential election. Local equities got a boost.

AI is emerging as a major new driver of global electricity demand, reinforcing the investment case for nuclear power and tightening the outlook for uranium markets heading into 2026.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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