The People's Bank of China (PBOC) has established the yuan’s daily reference rate, or “fix,” at 7.0796 per US dollar — the strongest level since October 2024 — signalling clear support for the Chinese currency as markets prepare for potential U.S. rate cuts. ([People's Bank of China][1])

The firm fixing comes after the offshore yuan briefly touched 7.0794 on Tuesday, an intraday high matching the on-shore midpoint. By midday Wednesday, the offshore rate strengthened further to around 7.078. ([Google][2])

Economists say this could mark the beginning of a gradual but sustained yuan appreciation cycle — especially if the Federal Reserve (Fed) lowers U.S. interest rates as expected at its December meeting. “In the absence of tangible improvements in China’s macro fundamentals, I tend to see this as a recognition of its geopolitical power,” said one senior economist. The combination of a firmer yuan fix and a weakening dollar could push the renminbi even higher. ([Reuters][3])

Analysts highlight that the strengthened fix and recent state-backed dollar-buying operations by Chinese banks signal a deliberate policy choice, not a market-driven move. This echoes previous episodes when China used exchange-rate management to stabilise the yuan under volatile global conditions. ([Reuters][3])

Despite sluggish domestic economic growth, depressed interest rates and persistent global uncertainty, the yuan looks increasingly attractive to international investors. Daily turnover in the USD/CNY pair has risen roughly 60 percent since 2022, reflecting growing global interest in the currency. ([Reuters][3])

The market now watches closely whether upcoming U.S. monetary policy moves — especially a potential Fed rate cut — will accelerate yuan gains, and if China will maintain its strong guidance amid capital-flow pressures. For the time being, the stronger fix suggests Chinese authorities are confident in the yuan’s rising status in global finance.