{"id":38085,"date":"2026-01-02T13:50:27","date_gmt":"2026-01-02T05:50:27","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=38085"},"modified":"2026-01-02T13:50:27","modified_gmt":"2026-01-02T05:50:27","slug":"offshore-yuan-holds-firm-near-multi-year-highs","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/offshore-yuan-holds-firm-near-multi-year-highs\/","title":{"rendered":"Offshore Yuan Holds Firm Near Multi-Year Highs"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/Image_fx-2025-05-16T130402.470-1024x559.png\" alt=\"\" class=\"wp-image-22441\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USDCNH steadied around 6.97, the strongest level since May 2023.<\/li>\n\n\n\n<li>The yuan rose roughly 5% in 2025, marking its largest annual gain since 2020.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The offshore yuan steadied around 6.97 per dollar on Friday, trading at its strongest level since May 2023. The move came despite softer guidance from China\u2019s central bank, as exporter dollar selling continued to underpin the currency.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China handed yuan bulls a New Year\u2019s gift with tacit consent for more appreciation, while carefully pacing the currency\u2019s gains to avoid hurting exporters and accelerating hot-money inflows <a href=\"https:\/\/t.co\/HIpevIn5Y4\">https:\/\/t.co\/HIpevIn5Y4<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2006243125291810910?ref_src=twsrc%5Etfw\">December 31, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>USDCNH last traded near 6.973, reflecting steady demand for the yuan rather than speculative inflows.<\/p>\n\n\n\n<p>The yuan also capped a strong year, rising roughly 5% in 2025. This marked its largest annual gain since 2020 and snapped a three-year losing streak.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China\u2019s yuan climbed past the psychological milestone of 7 per dollar for the first time since September 2024, on bets the central bank will allow a gradual appreciation to boost market confidence <a href=\"https:\/\/t.co\/hJIEUL8etj\">https:\/\/t.co\/hJIEUL8etj<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2004022872679858323?ref_src=twsrc%5Etfw\">December 25, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The scale of the advance has shifted market behaviour, with exporters accelerating dollar conversions rather than holding foreign currency.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Exporter Flows Drive Persistent Support<\/h2>\n\n\n\n<p>Ongoing exporter activity has played a central role in the yuan\u2019s strength. Companies have continued converting foreign currency receipts into yuan, driven by payment schedules and administrative requirements.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Chinese mine operators in Zambia started paying royalties and taxes in yuan in Africa\u2019s second-biggest copper producer, the latest sign of the growing acceptance of the currency on the continent <a href=\"https:\/\/t.co\/t2QFYtuKx3\">https:\/\/t.co\/t2QFYtuKx3<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2006364290962292949?ref_src=twsrc%5Etfw\">December 31, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Traders said these flows likely carried into early January, providing a steady bid even as official guidance turned less supportive.<\/p>\n\n\n\n<p>This flow-based demand has proven resilient. It has absorbed attempts by authorities to slow the pace of appreciation, keeping the currency firm despite repeated signals aimed at tempering gains.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Central Bank Guidance Fails to Reverse Trend<\/h2>\n\n\n\n<p>The rapid advance in the yuan has prompted China\u2019s central bank to act. Policymakers have leaned on softer guidance rates and verbal warnings in state media to discourage one-way bets.<\/p>\n\n\n\n<p>These measures aimed to prevent the currency from overshooting levels seen as uncomfortable for exporters.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">China has kept its central bank on the sidelines of managing an economy hampered by weak demand and deep-seated imbalances, defying Wall Street forecasts for the biggest interest-rate cuts in a decade <a href=\"https:\/\/t.co\/Ky3p7CAkWv\">https:\/\/t.co\/Ky3p7CAkWv<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2005780460387881078?ref_src=twsrc%5Etfw\">December 29, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>So far, these efforts have slowed momentum rather than changed direction. Price action suggests the market continues to prioritise underlying demand over guidance, especially while exporter selling remains active.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Improved Data Lifts Confidence in China<\/h2>\n\n\n\n<p>The yuan\u2019s strength has also drawn support from signs of improving confidence in the Chinese economy. Data showed <a href=\"https:\/\/t.co\/EWcViQ5o8Y\" target=\"_blank\" rel=\"noopener nofollow\" title=\"\">manufacturing activity performed better than expected<\/a> in December, easing concerns about near-term growth momentum.<\/p>\n\n\n\n<p>This improvement has reduced pressure for aggressive policy easing and helped stabilise sentiment around Chinese assets. As a result, currency traders have grown more comfortable holding yuan exposure rather than positioning defensively.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The offshore yuan continues its bullish streak against the dollar, with USDCNH tumbling below the psychological <strong>7.00<\/strong> level\u2014marking its lowest point in months.<\/p>\n\n\n\n<p>The pair has maintained a persistent downtrend since the <strong>7.22384<\/strong> peak in August, with all short- and mid-term moving averages pointing sharply lower.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/1_image-1024x448.jpg\" alt=\"\" class=\"wp-image-38086\" \/><\/figure>\n\n\n\n<p>Momentum remains firmly bearish as the MACD histogram deepens in negative territory.<\/p>\n\n\n\n<p>This move suggests strong confidence in the yuan amid sustained dollar weakness and supportive domestic flows.<\/p>\n\n\n\n<p>While the pair may find temporary relief near <strong>6.97<\/strong>, the absence of bullish divergence in momentum signals further downside risk unless a reversal pattern emerges.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Outlook as Policy Friction Builds<\/h2>\n\n\n\n<p>The yuan may remain supported near current levels as long as exporter flows persist and the dollar stays soft. However, increased pushback from policymakers could limit the pace of further gains.<\/p>\n\n\n\n<p>In the near term, USDCNH may consolidate around the 6.95 to 7.00 range, with direction shaped by flow dynamics and any escalation in guidance rather than a sharp shift in fundamentals.<\/p>\n\n\n\n<p><strong>Learn more about trading <a href=\"https:\/\/www.vtmarkets.com\/forex\" target=\"_blank\" rel=\"noopener\" title=\"\">Forex Pairs<\/a> on <a href=\"https:\/\/www.vtmarkets.com\/trade-now\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets<\/a> today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The offshore yuan holds near 6.97 as exporter dollar selling and a weaker USD offset softer policy guidance. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":22441,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10,68],"class_list":["post-38085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-forex","tag-yuan"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38085","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=38085"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38085\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/22441"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=38085"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=38085"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=38085"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}