China's Yuan Soars to Three-Year High Amid Beijing Policy Support

China's offshore yuan has reached a three-year high after Beijing signaled policy support. The People's Bank of China set the currency's daily fixing rate at 6.7894 per US dollar for the third consecutive day, just below Thursday's record of 6.7892. This move came as the Communist Party's Politburo vowed to step up macroeconomic policy support and enhance the resilience of capital markets in the remaining months of the year.

The offshore yuan extended its rally to 6.7433 by early Friday afternoon, marking its strongest level since February 2023. Analysts see this as a sign that Beijing is committed to stabilizing growth amid a recent slowdown in economic activity and rising volatility in global markets.

RBC Capital Markets' Asia macro strategist Abbas Keshvani said the Chinese yuan has outperformed traditional defensive currencies such as the Singapore dollar, Japanese yen, and Swiss franc since the outbreak of the US-Israel war on Iran. He believes that Chinese authorities tend to 'marshal the currency through periods of volatility', making it a promising hedge against global uncertainty.