China’s yuan edges higher ahead of US inflation print, near 14-month high

SHANGHAI: [China’s yuan ](https://China’s yuan hits fresh 14-month high on dollar weakness)inched higher in a tight range on Thursday, hovering near a 14-month peak ahead of US inflation data later in the day, as investors stayed cautious and awaited Donald Trump’s pick for the next Federal Reserve chair.

The spot yuan opened at 7.0450 per dollar and was last trading at 7.0428 as of 0249 GMT, 22 pips firmer than the previous late session close.

Market participants said the Fed chair announcement and the US inflation print could steer near-term dollar moves, likely keeping the yuan rangebound in the short term.

Prior to the market opening, the People’s Bank of China set the midpoint rate at 7.0583 per dollar, 180 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.

The daily fix has been weaker than Reuters’ estimates since late November, implying authorities’ unwillingness to allow sharp yuan gains.

HSBC analysts expect the dollar-yuan pair to gradually diverge from broader dollar moves. They forecast a modest, steady yuan appreciation, aligned with Beijing’s priorities of industrial upgrading, technological self-reliance, rebalancing growth toward domestic demand and promoting yuan internationalisation.

“The cross-border flow picture has also improved, with a rise in exporters’ FX conversion, a reduction in FX purchases for services imports and a decline of FX-denominated financial outflows,” the analysts said.

The bank forecasts the onshore yuan at 6.95 by end-2026.

The offshore yuan traded at 7.0379 yuan per dollar, up about 0.04% in Asian trade.

The dollar’s six-currency index, which measures the greenback against a basket of currencies, was 0.035% higher at 98.41.