Yuan Reaches Four-Year High Against Dollar After Fed Rate Hike

China's yuan has reached a four-year high against the US dollar after the US Federal Reserve increased interest rates. The onshore yuan rose to 6.6853 against the dollar, while the offshore yuan hit 6.6927, both surpassing the 6.7 threshold for the first time in over four years.

The appreciation of the yuan is attributed to two main factors, according to Wang Qing, chief macroeconomic analyst at Golden Credit Rating International. Firstly, market expectations were met after the Fed's interest rate hike, leading to a rebound and subsequent decline in the US Dollar Index. Secondly, adjustments in the yuan central parity rate contributed to the currency's appreciation.

The People's Bank of China increased the yuan central parity rate against the dollar by 59 basis points to 6.7521 today, marking a total rise of 222 basis points this week. The global exchange rate market has experienced volatility due to geopolitical tensions and changes in the Fed's monetary policy. However, the yuan has maintained its strong trend, appreciating over 4 percent against the dollar.