The offshore yuan rose to around 6.98 per dollar on Thursday, rebounding from the previous session and moving closer to the psychologically important 7-per-dollar level, largely driven by exporters stepping up conversions of dollar holdings into the local currency. Toward the end of the year, exporters typically increase foreign-exchange conversions to meet a range of domestic obligations, including administrative expenses and employee-related disbursements. Additional support came from upbeat sentiment in the stock market, after the benchmark Shanghai Composite Index climbed to a fresh decade high, reinforcing confidence in Chinese assets more broadly. However, the yuan’s appreciation was partly capped by a weaker-than-expected daily midpoint fixing set at 7.0197 per dollar, signaling a more cautious stance from the People’s Bank of China. Looking ahead, investors remained focused on upcoming inflation data, which could provide additional clues on the outlook for monetary policy.
