Yuan firms as dollar slips, PBOC rejects undervaluation claims amid EU talks

The yuan rose against the greenback on Friday as the dollar pulled back from an 18-month high, Business Recorder reported. Meanwhile, the People's Bank of China pushed back against suggestions that its currency is priced too low, just as officials from Beijing and the European Union opened negotiations.

The central bank said on Thursday that it had never sought competitive depreciation of the currency. European policymakers want a firmer yuan to help curb China's record trade surplus and a sharp rise in exports. The two-day talks in Beijing follow three months of exchanges on the EU's goods deficit, which exceeds €1 billion daily, plus Chinese curbs on rare earth exports.

Analysts at Commerzbank said the central bank's paper aimed to frame the debate before any formal demands on the exchange rate gain momentum. Tommy Xie of OCBC added that Beijing aims to steer the discussion toward broader causes of global imbalances. Even with the dollar's recent firmness, the yuan has climbed 4.4% this year and close to 9% against the greenback since the end of 2024.