FX.co ★ Offshore Yuan Hits Over One-Year Peak

The offshore yuan appreciated to approximately 7.09 against the dollar on Tuesday, marking its strongest position since early October of the previous year. This rally can be attributed to promising signals of strengthening US-China relations. Earlier this week, US President Donald Trump engaged in a phone conversation with Chinese leader Xi Jinping, during which both administrations highlighted advancements on trade and tariff agreements made during their recent dialogue in South Korea. The two leaders have also consented to recommence high-level visits in the coming year, bolstering expectations that tensions are diminishing and that economic collaboration is regaining stability. Additionally, the People’s Bank of China continued its strategy to strengthen the yuan by setting the daily midpoint at 7.0826. This is stronger than Monday’s 7.0847 adjustment and above market predictions. The focus now shifts to the upcoming December Politburo meeting and Central Economic Work Conference, which are anticipated to provide indications of next year’s policy direction.