Yuan Hits Four-Year High Ahead of Trump-Xi Meeting
The yuan has reached its strongest level in over four years ahead of the planned meeting between Chinese President Xi Jinping and US President Donald Trump next week. The offshore yuan rose by as much as 0.1% to around $6.71, its highest point since July 2022. This comes after the People's Bank of China maintained pressure on the currency's daily trading reference rate for an eighth consecutive day.
The move is seen as a sign of confidence in the yuan and reflects China's efforts to expand its clearing infrastructure. The Shanghai Clearing House began central-counterparty services for spot transactions in the euro, yen, and pound against the yuan on September 14, allowing more currencies to access China's onshore central-clearing network.
The yuan has held firm despite signs of weak domestic credit demand, with Chinese banks extending just $60 billion in new loans in August, below economists' forecast of $400 billion. The currency is also Asia's strongest-performing currency this year, driven by robust Chinese exports and increased demand from companies converting foreign-currency earnings into yuan.