Yuan Hits Three-Year High as Beijing Signals Policy Support
China's offshore yuan has hit a three-year high after the central bank strengthened its daily fixing rate for the third consecutive day. The People's Bank of China set the yuan's midpoint at 6.7894 per US dollar, marking the strongest level since February 2023.
The offshore yuan further rose to 6.7439 by Thursday afternoon and extended its rally to 6.7433 on Friday morning, its strongest level in three years. The currency's strength comes after Beijing signaled policy support for the economy amid a recent slowdown in growth and rising global market volatility.
Abbas Keshvani, Asia macro strategist from RBC Capital Markets, said that China's currency has outperformed traditional defensive currencies such as the Singapore dollar, Japanese yen, and Swiss franc since the US-Israel war on Iran. He noted that Chinese authorities tend to 'marshal the currency through periods of volatility', adding that the recent strength is a reason to stay bullish even in peacetime.