The offshore yuan strengthened to around 6.95 per dollar on Monday, reversing the previous week’s losses and approaching a thirty-three-month high, after a strong manufacturing PMI data boosted sentiment. A private survey showed China’s factory activity expanding at its fastest pace since October, driven by faster production and front-loading of shipments ahead of the extended Lunar New Year holiday.

It contrasted with the official readings, which slipped back into contraction territory. Meanwhile, foreign exchange settlement demand remained strong and the central bank’s measured guidance through its daily fixings continued to support the yuan. In addition, expectations of an accelerated push for yuan internationalization are rising after Xi Jinping emphasized building a strong financial system with a globally influential currency. Highlighted in a state publication, his remarks stress risk control, central bank strength, and reforms to support the real economy amid a weakening dollar.