China's yuan hovers near 3-1/2-year peak, set for 8th straight weekly rise
- The onshore yuan traded in a tight range in morning deals and was last up 0.06% at 6.7221 per dollar
SHANGHAI: China’s yuan hovered near its 3-1/2-year peak against a weakening US dollar on Friday, with investors shifting attention to the Jackson Hole symposium for fresh policy signals from the Federal Reserve that could sway currency markets.
The dollar was on shaky ground and set for a weekly loss, as investors viewed the US Treasury’s bond buyback plan as merely a temporary fix while raising fresh concerns about officials’ increasingly interventionist approach.
In the spot market, the onshore yuan traded in a tight range in morning deals and was last up 0.06% at 6.7221 per dollar as of 0329 GMT.
It was not far from 6.7203, its highest level since February 2023, hit a day earlier.
If the yuan finishes the late night session at the midday level, it would gain 0.3% against the dollar to book its eighth straight weekly rise.
Its offshore counterpart last fetched 6.7224 yuan per dollar, up about 0.05% in Asian trade.
Prior to the market open, the People’s Bank of China (PBOC) set the midpoint rate at 6.7817 per dollar, 555 pips weaker than a Reuters’ estimate of 6.7262.
The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
The central bank has been setting weaker-than-expected midpoint fixing since November 2025, which market participants widely interpreted as an attempt to rein in excess strength and keep the market stable.
“This is consistent with a preference for gradual rather than one-way appreciation,” Christopher Wong, FX strategist at OCBC Bank, said in a note.
“Softer USD dynamics and exporter conversions should remain supportive for RMB, but the fixing behaviour suggests policymakers are unlikely to allow for an overly rapid move. Near term, we continue to see room for yuan strength, albeit at a measured pace.”
Separately, currency traders said they would focus on Fed Chairman Kevin Warsh’s speech at the central bank’s Jackson Hole symposium next week for clues on how he plans to tackle still-elevated inflation.
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