FX.co ★ Offshore Yuan Steady

The offshore yuan stabilized around 7.06 per dollar, reaching its strongest level in over a year, primarily due to the widespread weakening of the US dollar. This decline in the dollar followed the Federal Reserve's decision to implement a 25 basis point rate cut, with Chair Jerome Powell indicating that further rate hikes are off the table. Concurrently, the People's Bank of China set the daily midpoint at 7.0686 per dollar, marking its firmest stance since October 2024, although it was 161 pips weaker than Reuters' forecast. Since late April, the central bank has been consistently reinforcing its official guidance, indicating a cautious openness to a potentially stronger currency. Consequently, the yuan has strengthened by 3.4% so far this year and is on course for its most robust annual performance since 2020. The focus now shifts to the forthcoming Central Economic Work Conference, where Chinese policymakers are expected to set growth targets for the coming year and outline critical objectives for shaping China's 2026 economic blueprint.