Offshore Yuan Strongest Since 2022

The offshore yuan traded around 6.65 per dollar, reaching its strongest level since April 2022, supported by robust export growth and exporters converting dollar holdings into yuan. Exports surged 36.3% yoy to USD 447.18 billion in September 2026, marking the fastest annual growth in seven months, mainly due to robust global demand for electronics and semiconductors. Strong export performance helped the currency appreciate around 5% so far this year. Moreover, demand for the yuan remained firm as exporters stepped up dollar sales and hedging activity amid expectations of further appreciation. Meanwhile, the PBoC set its daily midpoint at 6.7138 per dollar, the strongest fixing since February 2023, though 590 pips weaker than Reuters' estimate. The gradual strengthening of the fixing suggests policymakers are comfortable with yuan appreciation but may seek to moderate its pace. The currency is on track to post its fourth consecutive monthly advance, having gained around 0.8% in October.