FX.co ★ Offshore Yuan Strongest Since 2023

The offshore yuan strengthened to around 6.86 per dollar on Wednesday, its highest level since April 2023, supported by a weaker US dollar. The greenback slipped amid uncertainty over US tariff and fiscal policies, with investor caution heightened ahead of US President Donald Trump’s State of the Union address. Further backing for the yuan came as Indonesia launched a new offshore yuan-denominated bond sale, gauging global demand at a time of ongoing concerns about the country’s fiscal outlook. This marks Indonesia’s second such issuance, following its debut in October, underscoring its strategy to leverage China’s relatively low borrowing costs. On the monetary policy front, the People’s Bank of China left its key rates unchanged for a ninth consecutive month, holding the one-year and five-year loan prime rates at 3.0% and 3.5%, respectively.