Monday morning saw a strong rebound in China's foreign exchange market, with the onshore yuan surging against the US dollar, closing at 6.9640 — an 80 basis point gain from Friday's overnight session. This rally not only broke a key psychological level but also signaled a notable shift in market sentiment.
What’s Driving the Yuan’s Climb? Multiple Forces Align
The yuan’s appreciation is backed by a confluence of factors. Stabilizing macro data, improved capital flows, and a weakening dollar index have collectively boosted the appeal of RMB-denominated assets. Analysts suggest that continued policy support could help anchor the currency amid volatility.
- Onshore yuan closed at 6.9640, marking a clear upward move
- Daily turnover reached $35.705 billion, indicating strong market engagement
- Falling US dollar index created room for non-dollar gains
- Stable PBOC fixing signaled policy consistency
What’s Next? Outlook Remains Cautiously Optimistic
While short-term momentum is positive, experts warn of lingering external risks — including Fed policy, geopolitical tensions, and global demand shifts. Still, if China's recovery gains traction, the yuan could see stronger support in the second half of the year.