Offshore yuan trades near 14-month high

The offshore yuan traded around 7.05 per dollar on Friday, hovering near its strongest level in more than a year, buoyed by renewed assurances from Chinese authorities on currency stability.

At the annual Central Economic Work Conference, policymakers reaffirmed their commitment to maintaining the yuan basically stable at reasonable and balanced levels.

They also underscored plans to maintain a “proactive” fiscal stance in the year ahead, outlining measures to boost both consumption and investment to support steady economic growth.

Externally, the yuan drew further support from a softer greenback after the Fed cut interest rates by 25 bps, with Chair Jerome Powell indicating that additional rate hikes have effectively been taken off the table.

For the week, the yuan is on track for its biggest weekly gain since October. The yuan also appreciated almost 3.5% against the greenback this year and appears on track for its strongest yearly advance since 2020.