Chinese Yuan Hits 33-month High

The offshore yuan slipped to around 6.90 per dollar on Friday, snapping a sixth straight day of gains and retreating from a 33-month high reached in the previous session, weighed down by a weaker-than-expected daily fixing. The People's Bank of China set the yuan’s midpoint rate at 6.9398 per dollar, 350 pips weaker than a Reuters estimate. The latest move signaled an effort to temper the currency’s recent appreciation, with policymakers remaining cautious about allowing the yuan to strengthen too quickly, as seasonal demand typically boosts the currency ahead of the Lunar New Year holiday. On the geopolitical front, the US has reportedly paused several major tech-security measures targeting China ahead of a planned April meeting between Presidents Donald Trump and Xi Jinping, easing some pressure on markets. Despite Friday’s pullback, the offshore yuan remains on course for a second straight weekly gain, marking its strongest weekly performance since May 2023.

The offshore yuan strengthened past 6.89 per dollar on Thursday, extending its rally to a sixth straight session and reaching its strongest level since May 2023, as China aimed to elevate the currency’s global standing. President Xi Jinping has reiterated his ambition for the yuan to become a global reserve currency, one widely used in international trade, investment and foreign exchange markets and held by central banks in sizeable amounts. The offshore yuan has climbed to a near three-year high against the dollar, with the dollar sliding 6% against the renminbi since the start of last year. Still, gains were tempered after China’s central bank reaffirmed its “moderately loose” monetary policy stance, prioritizing stable growth and a gradual recovery in prices. The policy stance came before the data showing that annual consumer inflation slowed to a three-month low of 0.2% in January 2026, while producer price deflation eased to 1.4%, the least in one and a half years.

The Chinese Yuan touched 6.90 against the USD, the highest since May 2023. Over the past 4 weeks, US Dollar Chinese Yuan lost 0.97%, and in the last 12 months, it decreased 5.03%.