Chinese Yuan Hits Strongest Level Since 2022 After PBOC Fixing

(Bloomberg) -- The yuan climbed to its highest level against the dollar in more than four years, extending an advance underpinned by broad Chinese export strength and support from the central bank.

The offshore yuan gained as much as 0.1% to 6.6967 per dollar on Friday, the strongest since July 2022. The move came after the People's Bank of China strengthened its daily currency fixing for an eighth straight session, the longest streak since 2023.

The firmer fixings suggest the PBOC is comfortable with a stronger yuan ahead of President Donald Trump's meeting with Chinese leader Xi Jinping in the US. Still, the central bank has kept its daily reference rates weaker than prevailing market levels, signaling a preference for gradual appreciation rather than a sharp move higher.

The fixing signals the authorities' "intent to narrow the gap between the fix and spot," said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. "Further gains are likely if the fixings continue on their recent trend."

The yuan is now heading for a seventh straight quarterly gain, making it one of Asia's best-performing currencies this year, as China's surging exports and robust conversion flows have supported the rally. The advance has persisted even as rising bets on a Federal Reserve rate hike push Treasury yields and the dollar higher, widening the China-US yield gap to a record.

(Updates with comments from ANZ in fourth paragraph.)