Yuan hits fresh multi-year peak as PBOC eases curb ahead of Trump-Xi summit

China's yuan hit a fresh multi-year high against the US dollar on Monday, reaching a level not seen since January 2023, as the People's Bank of China (PBOC) eased its curb on currency appreciation ahead of the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping. The official midpoint rate set by the PBOC was 6.7487 per dollar, the strongest since February 2023.

The spot yuan traded at a high of 6.6957 per dollar, up about 0.03% in Asian trade. Analysts noted that the PBOC has been setting its daily official guidance at levels weaker than market expectations, but the official midpoint has strengthened more rapidly this month, closing the gap with market expectations. The summit between Trump and Xi is expected to focus on AI, trade relations, supply chains, and Middle East tensions, although no major policy breakthroughs are anticipated.

While a stronger yuan may create a more stable trading environment and reduce the likelihood of renewed accusations of competitive depreciation, investors should approach the move cautiously, as it may be driven by policy-managed stability around the summit rather than a fundamental re-rating of the RMB.