Offshore Yuan Hits Fifteen-Month High

2025-12-23 05:34 By Joshua Ferrer 1 min. read

The offshore yuan strengthened to around 7.02 per dollar on Tuesday, hitting its highest in fifteen months, even as the People’s Bank of China signaled caution through its official guidance rate.

The central bank set its daily midpoint at 7.0523, the strongest since September 2024, though below market expectations, signaling caution amid rapid gains.

Meanwhile, the currency has surged over 3.8% this year, poised for its largest annual gain since 2020, supported by broad dollar weakness, easing Sino-US trade tensions, and resilient Chinese exports.

Year-end demand from exporters converting foreign receipts into yuan further underpinned strength.

Analysts expect the yuan to continue gradual gains in the new year, eyeing the 7-per-dollar mark, though domestic data, including slowing factory output and retail sales, suggest China’s economy faces headwinds.

However, the trade surplus with the US exceeded $1 trillion in the first eleven months of the year, providing support for the currency.



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