China's yuan rose to its strongest level in more than three and a half years against the U.S. dollar on September 21, as the People's Bank of China allowed its official guidance rate to strengthen more quickly.
Reuters reported that the onshore yuan reached 6.6950 per dollar, its strongest level since January 16, 2023. It finished the domestic session at 6.6955, its strongest close since June 30, 2022.
Before the market opened, the PBOC set the daily midpoint at 6.7487 per dollar, the strongest fixing since February 3, 2023. The midpoint remained weaker than a Reuters market estimate, but the gap between the official fixing and market expectations has narrowed this month.
Traders and analysts cited by Reuters have interpreted the change as a sign that the central bank has eased some of its previous resistance to yuan appreciation. The move comes ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for later this week.
The two governments are expected to discuss trade, artificial intelligence, supply chains and Middle East tensions, among other issues. Analysts quoted by Reuters cautioned that the currency move should not automatically be interpreted as the start of a sustained long-term appreciation cycle.
The yuan's recent strength reflects both policy management and market conditions, and its direction may change as investors reassess interest-rate differences, domestic economic conditions and the outcome of U.S.-China talks.