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The People’s Bank of China fixes the yuan’s midpoint at 6.8349 per dollar on Thursday, its strongest fixing since February 2023.
The yuan has been gradually appreciating in value since last year, helped by strong Chinese exports and improving investor sentiment towards China.
The Chinese yuan is gaining strength against the US dollar, with China’s central bank setting its daily reference rate at the strongest level seen in more than three years. The People’s Bank of China fixed the yuan’s midpoint at 6.8349 per dollar on Thursday, its strongest fixing since February 2023.
The development comes as global banks turn increasingly bullish on the Chinese currency, at a time when the US dollar has been under pressure globally.
The offshore yuan also extended gains after rising 0.22% on Wednesday. It was trading near 6.803 per dollar during Thursday’s session.
The yuan has been gradually appreciating in value since last year, helped by strong Chinese exports and improving investor sentiment towards China. Analysts say expectations of stable ties between Beijing and Washington are also supporting the currency.
According to a report by Bank of America, the yuan could strengthen further to 6.70 per dollar by the end of this year. The bank said easing geopolitical tensions and China’s preference for currency stability during uncertain global conditions may support the rally.
Market sentiment also improved after last week’s meeting between US President Donald Trump and Chinese President Xi Jinping passed without major friction. The report said the summit signalled “a stabilisation of relations and opens the door to some goodwill yuan appreciation”.
Apart from external factors, domestic economic indicators in China have also shown signs of recovery. China’s producer price index rose 2.8% in April from a year ago, beating market estimates and signalling improving industrial activity.
Meanwhile, Goldman Sachs has turned more bullish on the Chinese currency. The brokerage now expects the yuan to strengthen to 6.50 per dollar over the next 12 months, while projecting gradual gains in the near term as well.
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