Yuan holds near 3-1/2-year high as investors await US inflation data

Business Recorder reported that the yuan traded little changed near a 3-1/2-year high against the dollar on Thursday, with market participants looking ahead to US inflation figures due Friday. Those numbers are seen as key to the Federal Reserve's policy path and the dollar's direction. Separately, the gap between 10-year US Treasury yields and Chinese counterparts widened to a record, lifted mainly by a climb in US yields.

The People's Bank of China set the yuan midpoint at 6.7766 per dollar before the open, its strongest since February 8, 2023, yet 692 pips below a Reuters estimate of 6.7074. The spot yuan may move within 2% above or below that fixed rate every day. Since November 2025 the central bank has set the midpoint weaker than forecasts, which analysts and traders link to an aim of anchoring stability and limiting rapid gains.

Onshore, the currency was priced at 6.7080 per dollar by 0321 GMT, near Monday's 3-1/2-year peak of 6.7050. A Chinese bank's trader expects the yuan to drift sideways before Friday's figures, with markets putting the odds of a Fed increase this month near 60%. Elias Haddad of Brown Brothers Harriman said the yuan's rise against the dollar remains intact and that a firmer currency could help China shift toward consumer spending through cheaper imports.