Yuan Hits Four Year High Against US Dollar

By Staff, Agencies

The Chinese yuan strengthened to its highest level against the US dollar since July 2022 on Friday, supported by robust exports, increased currency conversions and guidance from the People’s Bank of China (PBOC), Bloomberg reported.

The offshore yuan rose to 6.6967 per dollar, extending a rally that has made it one of Asia’s best-performing currencies this year.

The gains followed the PBOC’s decision to strengthen its daily reference rate for an eighth consecutive session, the longest such streak since 2023. The central bank sets the fixing each morning, around which the onshore yuan is allowed to trade within a designated range.

The continued stronger fixings indicate that Chinese authorities are prepared to tolerate further yuan appreciation. However, the reference rates have remained weaker than prevailing market levels, suggesting Beijing is favoring an orderly rise rather than a rapid increase in the currency’s value.

The fixings signal authorities’ “intent to narrow the gap between the fix and spot,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. “Further gains are likely if the fixings continue on their recent trend,” he added.

The yuan’s advance comes ahead of an anticipated meeting in the United States between Chinese President Xi Jinping and US President Donald Trump.

Strong Chinese exports and the continued conversion of overseas earnings into yuan have also supported the currency, which is heading toward a seventh consecutive quarterly gain.

The yuan’s appreciation has continued despite expectations of another US Federal Reserve interest-rate increase.

Those expectations have lifted Treasury yields and the dollar, while widening the yield gap between China and the United States to a record level.