China’s currency has shown renewed strength in recent sessions, with the yuan appreciating against the US dollar and hitting its strongest official fixing in more than a year.
Market participants say the gains reflect improving confidence in China’s economic outlook, alongside steady policy signals from authorities aimed at maintaining currency stability. Offshore trading has also indicated growing momentum, with the yuan breaking through key technical levels.
Analysts expect the currency to remain broadly stable in 2026, with some forecasting modest appreciation if economic growth firms and capital flows stabilise. China’s central bank has continued to guide the currency through daily reference rates, reinforcing its commitment to preventing excessive volatility.
Supportive factors include easing pressure from US interest rates, a narrowing yield gap, and measures to attract foreign investment. Export performance and trade balances have also contributed to improved sentiment toward the yuan.
While challenges remain, including global economic uncertainty and uneven domestic recovery, economists note that policy tools remain available to manage risks. Authorities have emphasised that stability, rather than sharp appreciation or depreciation, remains the primary objective.
The recent gains underscore a shift in market expectations, with the yuan increasingly viewed as resilient amid changing global monetary conditions and recalibrated investor outlooks on China’s economy.
