File photo: AFP

Of course, Covid is not fading everywhere. The Anglo-Saxon world appears to have a real love and affinity for hosting it. The UK and US are the negative outliers having grossly mismanaged the crisis from beginning to now with little relief in sight.

But much of the rest of the world (ex-Latin America) is returning to work and global stock markets are forecasting something close to a V-shaped recovery. 

Under these circumstances, dollar demand is receding rapidly and the DXY (dollar index) – after a wild ride from 97.40 at end-January through 102.82 at March 20 and back to 97.40 today – signals a return to pre-Covid normalcy.

Such normalcy is also reflected in the yuan quotations, which are back to where we were before the Trump China tantrum as the US President appears to be temporarily distracted by domestic disturbances, compared to which the Hong Kong unrest of last year and police mobilisation, which Trump so eloquently and with a bleeding heart deplored, looks more like child’s play.

The PBoC set yuan parity at 7.1074 Wednesday morning. At 7pm HK time, it was virtually unchanged at 7.1086. CNH at 7.1146 signals no offshore concern and divergent views from the onshore CNY.

We cannot rule out a return to greater yuan volatility as, obviously, we cannot rule out a return to greater Trump volatility. If the US President’s tough “law-and-order” domestic posture does not provide him with a lift in the polls, he may well return quickly to the tried and proven anti-China stance.

But in fact the options he has to make much hay on that score are limited.

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