The offshore yuan appreciated past 6.98 per dollar on Wednesday, remaining near the fifteen-month high reached in the previous session and on track for its biggest annual gain since 2020, as better-than-expected PMI data bolstered market sentiment. Official data showed China’s composite PMI rose to a six-month high of 50.7 in December 2025, with the manufacturing PMI returning to growth for the first time since March (50.1 vs 49.2 in November) and the non-manufacturing PMI also reaching a five-month high (50.2 vs 49.5). Meanwhile, a private survey indicated that manufacturing PMI unexpectedly increased to 50.1 in December from a four-month low of 49.9. These encouraging figures support China’s growth target of around 5% for this year. However, the yuan’s rapid appreciation has prompted state media to caution against one-way bets, with the central bank pledging to curb “overshooting risks” and setting its daily yuan fixing below market expectations for the past two weeks.
