Yuan hovers near 2-week high as market awaits economic data

SHANGHAI: China’s yuan held near a two-week high against the US dollar on Thursday, moving in a tight range as investors waited for a raft of economic indicators that could shape the policy outlook for the rest of the year.

China is due to release October credit data this week and other indicators of economic activity such as retail sales, industrial output and investment on Friday.

An MUFG analyst said the data set could show some softening in momentum but policymakers are only likely to provide marginal stimulus in the last quarter of 2025 with more support likely to come in 2026.

The onshore yuan firmed to 7.1108 per dollar in early trades, the strongest level since October 31.

Prior to the market opening, the People’s Bank of China set the midpoint rate at 7.0865 per dollar, 291 pips firmer than a Reuters estimate.

The spot yuan is allowed to trade a maximum of 2% either side of the fixed midpoint each day.

Broader US dollar signals indicate the offshore yuan could firm against the greenback while remaining confined to a 7.09–7.15 range, Maybank analysts said in a note, adding they expect the pair to reach 7.07 by year-end.

The offshore yuan traded at 7.1123 yuan per dollar, down about 0.01% in Asian trade.

A slew of investment banks pushed back on near-term rate cuts in China, after the country released its third-quarter monetary policy report on Tuesday.

Analysts at Huatai Securities expect the PBOC to refrain from cutting policy rates until the end of 2026, even as monetary settings are likely to remain accommodative in the near term.

The spot yuan opened at 7.1135 per dollar and was last trading at 7.1117 as of 0207 GMT, 8 pips firmer than the previous late session close and 0.36% weaker than the midpoint.

Meanwhile, investors are still weighing the geopolitical tensions between the US and China, the world’s two largest economies, to gauge the direction of the yuan.

China has overstocked on soybeans after months of record imports, which could hinder US export hopes despite a trade truce that Washington said included a promise by Beijing to start buying soybeans again.

The dollar index, which measures the greenback against six major currencies, was 0.005% lower at 99.48.

The Russian Finance Ministry said on Wednesday it would launch two debut issues of yuan-denominated domestic government bonds with maturities ranging from three to seven years on December 8.