The offshore yuan strengthened to above 7.15 per dollar on Thursday, hitting its highest level since early November 2024, boosted by a broad US dollar weakness. The dollar index slipped to an over three-year low amid easing geopolitical tensions, expectations of Fed Reserve rate cuts, and rising fiscal concerns. While the dollar faces headwinds, Beijing is intensifying efforts to internationalize the yuan.
The People’s Bank of China is establishing a new center in Shanghai to promote the digital yuan and has launched initiatives to encourage its use in global trade and finance. Premier Li Qiang’s optimism over China’s steady growth and shift toward a consumption-led economy added further confidence in the currency. Analysts suggest that the recent US–China tariff truce has also provided stability to the yuan; however, attention is turning back to a looming reciprocal tariff deadline. Traders also looked ahead to next month’s Politburo meeting for clues of further economic stimulus.
