2025.12.0104:15:22UTC+00Offshore Yuan Hovers Over One-Year Peak

The offshore yuan is hovering around 7.07 per USD, marking its peak since early October of the previous year. This position comes as the US dollar experiences broad weakening, which has counterbalanced weak factory activity data emerging from China. The decline in the US dollar continues to bolster the yuan, with investors anticipating an important month that may see the Federal Reserve implementing its final rate cut of the year, along with the possible confirmation of a dovish successor to Chair Jerome Powell. Within China, a private survey indicated that factory activity regressed into contraction in November, underscoring persistent softness in domestic demand. This insight is reinforced by recent official reports released on Sunday, which highlight another month of lackluster manufacturing results alongside a cooling services sector. Market observers are now paying close attention to the yuan's daily official fixings, seeking clues on the People's Bank of China's stance, especially as there are signs of efforts to moderate the yuan's recent appreciation. Furthermore, traders are concentrating on the upcoming Central Economic Work Conference, anticipating potential indications regarding the policy agenda for the forthcoming year.