The yuan strengthened for the 7th straight session and touched 6.6276 per USD on Wednesday, the strongest since July of 2018, led by firmer central bank guidance and recent upbeat economic data. The People’s Bank of China (PBOC) set the midpoint rate at 6.6781 per dollar, the highest since July 16th, 2018. Official data released earlier this week showed China’s economic recovery accelerated in Q3, amid continued support from the Chinese government and the central bank. The currency has been rallying since mid-May as investors rush to buy Chinese assets and debt amid signs of a faster and sustained economic recovery. The People’s Bank of China already attempted to lower the cost of shorting the currency, and stop the rally by lowering the risk reserve ratio for FX forwards trading to 0%.
Historically, the Chinese Yuan reached an all time high of 8.73 in January of 1994. Chinese Yuan - data, forecasts, historical chart - was last updated on October of 2020.
The Chinese Yuan is expected to trade at 6.66 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 6.74 in 12 months time.