China yuan hits 3-1/2-year high as yen strength weighs on dollar

WASHINGTON, 21 SEPTEMBER 2026 —

China's yuan strengthened to a fresh 3½-year high against the dollar on Thursday, lifted by a firmer central bank fixing and broad dollar weakness driven by a resurgent Japanese yen, Reuters reported from Shanghai.

The People's Bank of China set the daily midpoint at 6.7807 per dollar before the market opened, its strongest level since February 8, 2023, according to the report. The fixing came in 640 pips weaker than the Reuters consensus estimate of 6.7167, extending a pattern in place since November 2025 of guiding the currency below market forecasts to curb rapid appreciation.

In the spot market, the onshore yuan rose to 6.7180 per dollar, the strongest since February 2, 2023, before trading at 6.7183 as of 0328 GMT, the report said. The offshore yuan fetched 6.7177 per dollar.

"The strength in the yuan was reflecting the rebound in the Japanese yen," a trader at a Chinese bank told Reuters. Investors are now focused on Friday's U.S. nonfarm payrolls report for clues on the Federal Reserve's policy path, the trader added. Markets currently price a 61% probability of a Fed rate hike in September, according to the report.

The dollar index has fallen more than 2% since late July, while the yuan has gained less than 1% against the greenback over the same period, Reuters reported, citing RSS data. Year to date, the Chinese currency has risen more than 4% versus the dollar, making it one of Asia's best performers.

Goldman Sachs economists expect policymakers to favour gradual appreciation of 3% to 5% per year against the dollar. They said this pace best balances objectives that include fostering advanced-industry growth, building a "manufacturing superpower", boosting self-sufficiency in critical technologies and supply chains, and accelerating renminbi internationalisation.

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