Chinese Yuan Hits Four-Year High as Dollar Weakens Ahead of Policy Meetings
The onshore yuan briefly reached 6.6682 per US dollar on Monday, its strongest since June 2022, while investors assessed China's currency guidance and upcoming central bank decisions.
China's onshore yuan strengthened to its highest level against the US dollar in more than four years during Monday's Asian trading session, as a softer dollar and expectations surrounding central bank policy helped support the Chinese currency.
The yuan briefly traded at 6.6682 per dollar on October 26, its strongest level since June 2022, according to market reporting. It was quoted at 6.6691 at 02:52 UTC. A lower dollar-yuan exchange rate indicates that fewer yuan are needed to buy one US dollar, meaning the Chinese currency has strengthened.
The People's Bank of China set its daily reference rate at 6.7162 yuan per dollar before trading began. The central bank uses this midpoint to guide the onshore market, where the exchange rate is allowed to move within a specified band. The midpoint was stronger than recent official reference rates but weaker than some market estimates, suggesting a preference for controlled appreciation rather than a sudden jump.
The Economic Times reported the session's onshore trading high and reference rate. Reuters independently reported the central bank's fixing and the currency's four-year high. The Economic Times report also drew on agency material, so the two pages should not be interpreted as fully independent market-data measurements.
Investors were also looking ahead to policy meetings in China and abroad. The US Federal Reserve, the Bank of Japan and the European Central Bank are all due to make interest-rate decisions during the week, while Chinese officials are meeting to discuss domestic priorities.
The rise in the yuan does not establish that its appreciation will continue. Exchange rates can reverse quickly in response to interest-rate expectations, economic data or official intervention. A stronger yuan can reduce the local-currency cost of imported goods, but may also affect the competitiveness of some Chinese exports.
Monday's movement was a market price observation rather than an announced policy change. The level and direction of the currency may differ later in the session.
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