Offshore Yuan 6.6957 Per Dollar Strongest Since July 2022 PBOC Eighth Consecutive Stronger Fixing Longest Streak Since 2023 Seventh Straight Quarterly Gain One Of Asia’s Best-Performing Currencies 2026 PBOC Keeping Fixings Weaker Than Market Levels Signalling Gradual Not Sharp Appreciation China-US Yield Gap Widens To Record As Fed Rate Hike Bets Build
The Chinese yuan climbed to its strongest level in more than four years on Friday, with the offshore yuan gaining as much as 0.1% to 6.6957 per dollar, the strongest since July 2022. The move came after the People’s Bank of China strengthened its daily currency fixing for an eighth straight session, the longest streak since 2023. Bloomberg
The firmer fixings suggest the PBOC is comfortable with a stronger yuan ahead of President Donald Trump’s upcoming meeting with Chinese leader Xi Jinping in the United States. Still, the central bank has kept its daily reference rates weaker than prevailing market levels, signalling a preference for gradual appreciation rather than a sharp move higher.
The yuan is now heading for a seventh straight quarterly gain, making it one of Asia’s best-performing currencies this year, as China’s surging exports and robust conversion flows have supported the rally. The advance has persisted even as rising bets on a Federal Reserve rate hike push Treasury yields and the dollar higher, widening the China-US yield gap to a record.
Khoon Goh, head of Asia research at Australia and New Zealand Banking Group, said the fixing signals the authorities’ “intent to narrow the gap between the fix and spot,” adding that “further gains are likely if the fixings continue on their recent trend.”
Yet the PBOC’s management remains deliberate. China’s central bank is trying to engineer a calibrated ascent in the yuan that reflects stronger sentiment toward local assets and a weaker dollar, but also keeps its export engine humming. While the currency’s rally may be a vote of confidence from returning capital and thawing US relations, it may pose a risk for exporters as it reduces the competitive advantage of their products. In recent weeks, state-owned banks have been buying dollars from time to time to slow the yuan’s rally.
The yuan has gained nearly 4% against the dollar this year, down from above 7.00 in January. China’s economy expanded 4.3% in the second quarter of 2026, its weakest quarterly growth rate in more than three years, while Beijing has introduced an 800 billion yuan policy-financing programme to stimulate investment and support strategic industries.
The PBOC is managing two contradictory goals at once: a stronger yuan for diplomatic optics ahead of Xi-Trump, and a gradual pace of appreciation to protect export competitiveness. The market is watching every fixing to see which goal wins.
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