FX.co ★ Offshore Yuan Holds Gains

The offshore yuan has maintained its strength at approximately 6.93 per dollar, hovering close to its peak level since May 2023. This performance is buoyed by a more favorable outlook for the currency, which has enhanced market sentiment. Major global investment banks have become increasingly optimistic about the yuan after it surpassed the critical 7-per-dollar threshold late last year. In 2025, the yuan appreciated by roughly 4.5% against the dollar, bolstered by a softer dollar, changing interest rate expectations, and renewed faith in China’s macroeconomic stabilization efforts. Current year-end forecasts from 13 banks now estimate the yuan at 6.91 per dollar, a significant upgrade from the projections made in early December that predicted it would remain above 7 until 2026. Nonetheless, analysts anticipate that any additional appreciation will be gradual and closely monitored, as the People’s Bank of China has expressed concerns over the yuan’s swift gains. On the economic front, a private survey indicated that the composite PMI rose to a three-month high of 51.6 in January, with growth observed both in the manufacturing (50.3 compared to 50.1) and services (52.3 compared to 52) sectors.