China’s renminbi hits 3½-year high as yen’s strength weighs on US dollar
China’s renminbi inched higher to a fresh 3-½-year high against the US dollar on Sept 3.
On September 3, China's renminbi achieved a significant milestone, reaching a fresh 3½-year high against the US dollar. The Central Bank of China fixed the midpoint rate at 6.7807 per US dollar, marking the strongest level since February 8, 2023. However, the market's actual rate was 640 pips lower than the forecasted 6.7167, indicating a stronger performance than expected.
The Chinese currency was permitted to trade within a 2% range above or below the midpoint each day. Throughout November 2025, the People's Bank of China has consistently set the midpoint rate lower than market expectations, aiming to maintain currency stability and prevent rapid appreciation.
The onshore renminbi soared to a record-high level of 6.7180 per US dollar, surpassing the 6.7183 level observed at 11.28 am Singapore time. Meanwhile, the offshore renminbi traded at 6.7177 per US dollar. According to a trader from a Chinese bank, the strengthening of the renminbi can be attributed to the reninforcing strength of the Japanese yen.
With markets gauging a 61% probability of a Federal Reserve rate hike in September, investors are eagerly awaiting the US non-farm payrolls data, scheduled for September 4. This report will provide crucial insights into the US Federal Reserve's monetary policy outlook. Experts at Goldman Sachs predict that China's policymakers will continue to support a gradual appreciation of the renminbi against the US dollar (3 to 5% per year), as it strikes a balance between economic growth, fostering self-sufficiency in critical technologies, and enhancing the global presence of the renminbi.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
