Yuan hits four-year high as PBOC guides currency up before Trump-Xi summit

The offshore yuan climbed to its strongest level since July 2022 on Friday, reaching 6.6957 per dollar, as the People's Bank of China strengthened its daily currency fixing for an eighth consecutive session — the longest such streak since 2023. The move comes despite a broadly stronger U.S. dollar and ahead of a meeting between President Donald Trump and Chinese leader Xi Jinping scheduled for September 24 in Washington.moneycontrol+1

Pre-Summit Positioning

Analysts view the PBOC's steady guidance as a deliberate signal from Beijing. Chang Wei Liang at DBS Group Research noted that "USD/CNH has been easing gradually towards 6.70 in defiance of a stronger USD," calling the decline in the USD/CNY fixing below 6.76 "perhaps a goodwill gesture from China ahead of the Trump-Xi summit". The U.S. is also reportedly holding back a planned announcement of new tariffs related to alleged excess manufacturing capacity until after next week's meeting.fxstreet

Serena Zhou, senior economist at Mizuho Securities Asia, said "the renminbi is likely to receive further support from the Trump-Xi summit," forecasting the offshore yuan to end September around 6.70 per dollar with a year-end target of 6.65. She added that expectations for yuan appreciation have become "increasingly self-reinforcing" even as the China-U.S. yield gap has widened to a record.moneycontrol

Broader Summit Stakes

The yuan is now on track for a seventh straight quarterly gain, making it Asia's best-performing currency this year with roughly 4% appreciation against the dollar. The summit agenda extends well beyond currency matters: artificial intelligence, the fate of the bilateral trade truce set to expire in November, and Beijing's export curbs on rare earths are all expected to feature prominently. A Goldman Sachs The Goldman Sachs Group, Inc. ↘ 0.36% survey found 46% of offshore investors expect Chinese stocks to rise after the talks, though options positioning suggests foreign investors remain cautious.finance.yahoo

Measured Approach

Despite the firmer trajectory, the PBOC has kept its daily reference rates weaker than prevailing market levels, suggesting officials favor gradual appreciation rather than a rapid move. MUFG Research expects the summit to yield "incremental progress on trade communication" but "limited breakthroughs on technology controls," with any constructive post-meeting statement supportive for Chinese assets and regional supply-chain beneficiaries. Abbas Keshvani at RBC Capital Markets Royal Bank of Canada ↘ 1.28% noted that the yuan benefits from China's low dependence on imported energy, adding that "the PBOC tends to marshal the currency stable through periods of volatility".mufgresearch+1