The deputy governor of the People's Bank of China said that the Chinese currency could strengthen against the US dollar now that it is less volatile.

Since mid-May, when the Chinese currency weakened by about 6 percent, it has rebounded by about 1 percent, as China's zero-COVID policies hampered business and economic activity.

According to the South China Morning Post, Pan was quoted as saying that the exchange rates were stable.

China's economy is better prepared to handle cross-border capital flows and currency fluctuations thanks to the government's stimulatory policies.

The US dollar index hit a 20 year high as markets priced in the Federal Reverse's aggressive campaign for raising interest rates to cool prices while still engineering a soft landing that doesn't slam the economy.

The dollar could be weakened by the Fed as it tries to avoid a recession.

According to Pan, many market institutions believe that it will become more difficult for the Fed to control inflation. There are signs that the eurozone is getting tighter. The recent fall in the US dollar exchange rate is a result of these factors.