FX.co ★ Offshore Yuan Hits Over 1-Year High

The offshore yuan advanced beyond 7.06 per dollar, reaching its strongest position since October 2024. This upturn is attributed to a robust central bank exchange rate setting and a favorable shift in sentiment towards the currency. The People’s Bank of China announced the daily midpoint at 7.0754 per dollar, marking the most solid level since mid-October 2024, underscoring the central bank's dedication to ensuring currency stability. Contributing to the yuan's upward trend, several investment firms predict further strengthening of the yuan in the coming year, potentially breaching the crucial 7-per-dollar mark for the first time since 2023. Externally, the yuan received a boost from the softer US dollar, influenced by increasing speculation about a forthcoming Federal Reserve interest rate cut. On the economic landscape, a private survey revealed that China’s Composite PMI declined to a four-month low of 51.2 in November. The services sector showed a slowdown to a five-month low of 52.1, while the manufacturing index dropped to 49.9, its lowest in four months.