Offshore Yuan Strongest Since 2022
The offshore yuan traded around 6.69 per dollar on Monday, reaching its strongest level since July 2022, as a strong midpoint fixing by the People’s Bank of China supported the currency. The central bank set the yuan’s daily midpoint at 6.7313 per dollar, its firmest level since February 2, 2023, underscoring policymakers’ tolerance for yuan strength. The yuan was also underpinned by resilient Chinese exports and bullish calls from Western banks, which have argued that the currency remains undervalued. Meanwhile, China and the European Union recently reached an agreement that could reduce Chinese hybrid car exports to the bloc by more than half, as both sides seek to address the EU’s widening trade deficit with China amid growing tensions over trade imbalances and market access. Investors are now turning their attention to a series of Chinese economic releases, including inflation and trade data.
69 per dollar on Monday, reaching its strongest level since July 2022, as a strong midpoint fixing by the People’s Bank of China supported the currency. 7313 per dollar, its firmest level since February 2, 2023, underscoring policymakers’ tolerance for yuan strength. The yuan was also underpinned by resilient Chinese exports and bullish calls from Western banks, which have argued that the currency remains undervalued.
Meanwhile, China and the European Union recently reached an agreement that could reduce Chinese hybrid car exports to the bloc by more than half, as both sides seek to address the EU’s widening trade deficit with China amid growing tensions over trade imbalances and market access. Investors are now turning their attention to a series of Chinese economic releases, including inflation and trade data.