China’s Yuan Eyes Third Weekly Gain as Export Strength Defies Domestic Slump
The Chinese yuan is set for a third consecutive week of gains, bolstered by record-breaking exports despite domestic economic headwinds and trade tensions.
POLICY WIRE — Shanghai, China — The Chinese yuan maintained a stable position against the U.S. dollar on Friday, positioning the currency for a third consecutive week of gains. This upward momentum persists even as the nation grapples with sluggish domestic economic growth and rising global yields.
In late-morning trading on Friday, the onshore yuan was valued at 6.6907, showing minimal movement from its previous close on Thursday. Meanwhile, the offshore yuan reached approximately 7 per dollar, marking its strongest performance in over fifteen months following three straight sessions of appreciation.
Market sentiment is being driven by a surge in exports, which recently reached their fastest growth rate since the conclusion of the global financial crisis. This trade performance has placed China’s trade surplus on a trajectory toward record-breaking levels.
The People’s Bank of China has actively intervened to stabilize the market, raising its daily guidance fixing for three consecutive sessions to reach a new one-year high. This strategy aims to provide stability ahead of a critical policy meeting scheduled for next week, particularly as trade tensions with Washington remain elevated.
Analysts are increasingly optimistic that potential interest rate cuts by the U.S. Federal Reserve, combined with a cooling of trade hostilities, could push the yuan beyond the 7.0 psychological threshold. The central bank’s recent decision to set the daily reference rate below market expectations by a record margin underscores its commitment to maintaining foreign-exchange stability.
Reporting by Policy-Wire (PW)
