FINANCE

China’s Currency Climbs as Fed Cuts Rates

Published: Dec. 12, 2025 6:46 p.m. GMT+8

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The Chinese yuan has strengthened toward the 7.05-per-dollar mark, buoyed by the latest U.S. Federal Reserve rate cut and expectations of supportive macroeconomic policies.

The onshore yuan closed at 7.0554 Friday, gaining about 0.24% since Monday. The offshore yuan followed a similar trajectory, trading around 7.05.

China set the daily reference rate at 7.0638 Friday, 58 pips weaker than the previous day’s official close. The country has now set the fixing weaker than the prior close for nine consecutive days.

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The Chinese yuan strengthened toward 7.05 per US dollar, supported by a Fed rate cut and expectations of supportive policies.
The onshore yuan closed at 7.0554, rising 0.24% since Monday, while China’s daily reference rate was set weaker for nine consecutive days.
Robust exports and easing trade tensions bolster the yuan, but low yields may limit foreign investment appeal despite gradual appreciation.

AI generated, for reference only

Who’s Who

Yuekai Securities: Luo Zhiheng, chief economist at Yuekai Securities, attributes the strengthening of the Chinese yuan to robust exports, easing trade tensions, and the growing appeal of Chinese assets. He anticipates the yuan's resilience will continue into the next year.

Standard Chartered Bank: Ding Shuang, head of Greater China economic research at Standard Chartered Bank, offered insight into the Chinese yuan's appeal. He indicated that while low yields on yuan assets limit their foreign attractiveness, a gradual appreciation of the yuan could entice external investors seeking to boost returns through currency gains.

AI generated, for reference only