Markets

China's yuan inches higher, set for first weekly gain in three weeks

  • Spot yuan is allowed to trade 2% on either side of the fixed midpoint each day
Published July 3, 2026 Updated July 3, 2026 11:30am
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SHANGHAI: China’s yuan edged up on Friday, on track for its first weekly gain in three weeks, reflecting broad greenback weakness after a soft US jobs report pushed back expectations for Federal Reserve rate hikes.

At one point, onshore yuan strengthened 0.06% to 6.7790 per dollar — its strongest level since June 23 — before changing hands at 6.7815 as of 0325 GMT. If it finishes at the midday price level, it would have gained 0.24% for the week.

China’s central bank lifted its official midpoint guidance for the yuan to its highest in more than two years at 6.8047 on a softer US dollar. The greenback looked set for its biggest weekly drop in nearly three months after the US job data.

Spot yuan is allowed to trade 2% on either side of the fixed midpoint each day.

Offshore yuan last traded at 6.7845 per dollar as of 0325 GMT.

  Analysts at UOB said they expect the yuan to appreciate in the medium term.

“A Fed pause in the second half of this year — our base case — would reduce the rate differential headwind for the yuan, while the structural yuan internationalisation agenda and China’s persistently large trade surplus continue to provide underlying support,” they wrote in a note to clients.

Market participants said they plan to closely monitor June economic data due in the coming weeks for a clearer picture of the wider economy.

“June PMI and high frequency data continued to paint a picture of export-led growth recovery, while domestic demand and labour market remained subdued, with the property market

 weakening further and 618 shopping festival growth slowing sharply,“ said Jian Chang, chief China economist at Barclays.

“Next week, credit and inflation data are in focus.”

Traders are also closely watching a mid-year Politburo meeting later this month for potential policy signals from Beijing for the second half of the year.