China’s willingness to let the yuan strengthen is reshaping sentiment across emerging markets, according to a Bloomberg summary. The yuan’s moves increasingly ripple through other EM currencies — Bloomberg analysis shows that for every 1% move in the yuan, the Thai baht, Malaysian ringgit, Chilean peso, Mexican peso and Brazilian real tend to shift in tandem. Correlation between the dollar-yuan reference rate and the MSCI EM Currency Index is at its highest since May 2024.The People’s Bank of China has guided the yuan to its firmest reference rate since November, a notable shift from earlier efforts to damp volatility. The onshore yuan has gained more than 2% against the dollar this year, reversing three years of declines. Hedge funds have boosted bullish bets, targeting around 7 per dollar by year-end, reflecting growing confidence that Beijing is allowing gradual appreciation.Strategists told Bloomberg the stronger yuan benefits Asian peers and EM debt markets, while also supporting China’s long-term push to internationalize its currency. Analysts add that a rising yuan gives regional central banks more room to ease policy without weakening their currencies, and reinforces broader de-dollarization trends across Asia. This article was written by Eamonn Sheridan at investinglive.com.