FX.co ★ Offshore Yuan Trades Near 14-Month High

On Friday, the offshore yuan traded around 7.05 per dollar, marking its strongest position in over a year. This stability was bolstered by fresh commitments from Chinese authorities about maintaining currency stability. During the annual Central Economic Work Conference, policymakers reiterated their dedication to keeping the yuan stable at reasonable and balanced levels. They also emphasised plans to adopt a "proactive" fiscal approach in the coming year, introducing measures aimed at boosting both consumption and investment to ensure steady economic growth. Externally, the yuan received additional support from a weakening US dollar, following the Federal Reserve's decision to cut interest rates by 25 basis points. Fed Chair Jerome Powell signalled that further rate hikes are unlikely. This week, the yuan is poised for its largest weekly gain since October. Year-to-date, the yuan has appreciated nearly 3.5% against the dollar, setting the stage for its strongest annual advance since 2020.