Chinese yuan hits 3-1/2 year high on strong PBOC fixing

The Chinese yuan traded near a 3-1/2-year high against the dollar on Tuesday, supported by a firmer-than-expected central bank fixing as markets awaited a meeting between Chinese President Xi Jinping and U.S. President Donald Trump.

The People’s Bank of China set the yuan’s midpoint at 6.7459 per dollar, its strongest level since February 2023 and 28 pips firmer than Monday’s fixing

The onshore yuan’s USD/CNY pair fell to as low as 6.6947 yuan on Monday, its lowest level since January 2023, while the offshore yuan’s USD/CNH fell to 6.6908 yuan.

Both pairs traded largely unchanged on Tuesday, hovering near their multi-year lows.

The yuan has strengthened as the PBOC has recently allowed its daily fixing to strengthen at a faster pace, narrowing the gap with market expectations. The policy shift may reflect greater tolerance for gradual appreciation ahead of the Trump-Xi summit.

The leaders are expected to discuss trade, artificial intelligence, supply chains and Middle East tensions at their Sept. 23-25 meeting.