The RMB has strengthened to its highest level against the dollar in more than four years, despite a US Federal Reserve rate increase that might ordinarily have pressured Chinese assets. USD/CNY ended Friday at around 6.700, compared with 6.708 a week earlier, a decline of about 0.12%, meaning the RMB strengthened. Strong Chinese export receipts and companies converting dollar earnings into RMB have supported the currency, while expectations that Beijing is increasingly comfortable with appreciation have added momentum.
The PBOC has reinforced that impression, strengthening its daily fixing for eight consecutive sessions, the longest run since 2023. Friday’s fixing was 6.7521, stronger than Thursday’s 6.7580 and its strongest in more than three years. However, it remained considerably weaker than the roughly 6.7065 level markets had expected, indicating that policymakers have continued to restrain rather than accelerate the RMB’s rise. The pattern suggests Beijing has become more tolerant of appreciation while seeking to prevent a rapid move that could damage exporters.
The RMB has also strengthened against several other major currencies. One euro was worth about RMB7.69on September 18, down from roughly RMB7.78 a week earlier, a 1.2% fall, while sterling fell from around RMB9.07 to RMB8.96, meaning the RMB gained about 1.1%. The Australian dollar similarly declined from approximately RMB4.81 to RMB4.77, giving the RMB a roughly 0.9% gain. Against the yen, however, the RMB’s strength has been particularly pronounced: one yuan bought about JPY23.41, compared with JPY22.92 a week earlier. The yen weakened even after the Bank of Japan raised its policy rate to 1.25%, as investors questioned how much further tightening would follow.
The coming week will test how much appreciation Beijing is prepared to accept. President Xi Jinping’s scheduled meeting with US President Donald Trump on Thursday has put trade and exchange-rate policy back in focus, while markets will also watch China’s lending-rate decision and US economic data. The RMB’s resilience despite higher US rates suggests export inflows are currently outweighing China’s weak domestic credit demand—but the PBOC’s fixings show policymakers still prefer a controlled rise rather than an unchecked rally.