China yuan firms as exporter dollar sales lend support
- The spot yuan opened at 6.7957 per dollar and was last trading at 6.7935
SHANGHAI: China’s yuan firmed against the US dollar on Tuesday, as traders said exporter demand to convert dollar receipts at relatively strong levels helped keep the Chinese currency steady.
The yuan remained one of Asia’s best-performing currencies this year, though analysts said further gains would hinge largely on the dollar’s direction, with investors awaiting US jobs data later this week for clues on the Federal Reserve’s policy path.
The spot yuan opened at 6.7957 per dollar and was last trading at 6.7935 as of 0224 GMT, 25 pips firmer than the previous late session close.
Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.8109 per dollar, its strongest in two weeks and 232 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
The yuan has risen 2.9% against the US dollar so far this year, before it reversed some gains as the greenback hovered near a one-year high.
Whether the rally continues through year-end will largely depend on the direction of the dollar, analysts at Macquarie said in a note.
Under a base-case scenario of mild dollar weakness, the currency team at Macquarie expects the yuan to firm to 6.72 per dollar by year-end from around 6.79 currently. But if the dollar strengthens in the second half of 2026, the yuan could weaken against the greenback, the team said.
China’s factory activity returned to expansion in June, an official survey showed on Tuesday, driven by strong high-tech manufacturing exports linked to the AI boom, even as shipments of other goods remained weak alongside subdued domestic demand.
Markets are focused on the US nonfarm payrolls report for June, due on Thursday, after the data beat expectations for three straight months and helped support a hawkish shift by the Federal Reserve.
The offshore yuan traded at 6.7964 yuan per dollar, up about 0.07% in Asian trade.
The dollar index, which measures the greenback against a basket of six currencies, was 0.129% higher at 101.27.
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