FX.co ★ Offshore Yuan Steady After Trade Data

The offshore yuan stabilized around 6.97 per dollar on Wednesday, bolstered by robust external demand that continues to support China's economic growth. In December, exports surged by 6.6% year-on-year—the fastest rate observed since September—while imports increased by 5.7%, also marking their strongest growth since September. For the entire year of 2025, China's trade surplus expanded to an unprecedented $1.2 trillion, with exports acting as the main engine of growth, helping to mitigate weak domestic conditions. As we look toward 2026, the continued strength of global demand and China's competitive edge in exports are anticipated to sustain economic momentum, contingent upon the maintenance of the trade agreement with the US. Nevertheless, certain risks persist after US President Trump announced new tariffs on nations trading with Iran. In the meantime, investor sentiment towards Chinese assets has become increasingly optimistic, with confidence in the yuan growing as it moved firmly past the 7-per-dollar threshold. Some forecasts even suggest potential appreciation towards 6.25.