Key Points
- China’s yuan reaches its highest level against the US dollar in 32 months
- Dollar weakness intensifies yuan gains
- People’s Bank of China sets firmer midpoint guidance
- Seasonal exporter demand also supports strength
ISLAMABAD: China’s yuan climbed to a fresh 32‑month high against the US dollar as the greenback weakened sharply and the People’s Bank of China (PBOC) set a stronger daily midpoint exchange rate, signalling cautious support for the currency.
The onshore yuan strengthened to as much as 6.9449 per dollar, its strongest level since May 2023, before trading slightly lower, while the offshore yuan held near comparable levels.
The advance followed intensified global selling of the US dollar alongside seasonal foreign exchange settlement demand from Chinese exporters ahead of the Lunar New Year, according to Reuters
The PBOC set the official daily midpoint rate at 6.9755 per dollar, its firmest level since May 2023, reflecting a measured central bank stance that allows gradual yuan appreciation while discouraging rapid speculative movements.
Analysts said the weaker dollar backdrop and stronger equities could attract foreign inflows, further supporting the yuan.
Market observers noted that comments from US political leaders easing dollar strength encouraged additional greenback selling, helping push the yuan higher. Currency strategists expect that the US dollar could remain under pressure in 2026, supporting further gains for the yuan.
