Yuan hits fresh multi-year peak as PBOC eases curb ahead of Trump-Xi summit

Business Recorder reported that China's yuan climbed to its strongest level in more than three and a half years against the US dollar on Monday. The currency touched 6.6957 per dollar in early trade, the highest since January 16, 2023, after the People's Bank of China eased its curb on appreciation. The move came ahead of a meeting between the leaders of China and the United States later this week.

The PBOC set its daily midpoint at 6.7487 per dollar, the firmest since February 3, 2023, but 536 pips weaker than a Reuters estimate. For nearly a year the bank has kept the reference rate below market expectations, a pattern seen as a way to slow gains, although the gap has narrowed this month. US Treasury Secretary Scott Bessent and Vice Premier He Lifeng held talks in New York on Sunday, preparing the ground for a summit on Thursday where AI, trade, supply chains and Middle East tensions are expected to feature.

Goldman Sachs analysts said the stronger fixing matches recent behaviour and leaves more room for the offshore rate to rise. OCBC, however, urged caution about reading the move as the start of a lasting appreciation trend, citing a wide US-China yield gap and soft domestic economic conditions. Analysts also do not expect a major policy breakthrough at the summit.