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BEIJING — The Chinese yuan has climbed to its strongest level in more than three years, underscoring Beijing’s economic resilience and setting the stage for high stakes talks between President Xi Jinping and U.S. President Donald Trump later this week.
The People’s Bank of China set the central parity rate at 6.8426 per U.S. dollar, while the offshore yuan traded at 6.7922, its firmest level since February 2023.
The currency has appreciated 5.64 percent over the past year, making it one of Asia’s most resilient performers in 2026.
Export Boom Fuels Currency Strength
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China’s export machine continues to roar. In April, shipments surged 14.1 percent year-on-year, reaching a record USD 359.44 billion.
Much of this growth stems from global demand for artificial intelligence hardware, semiconductors, and electric vehicles, industries where China has consolidated its dominance.
The resulting trade surplus has bolstered foreign exchange reserves and provided Beijing with a cushion against external shocks.
Analysts note that China’s surplus relative to global GDP is now at its highest level in decades.
Regional Currency Context
The yuan’s rise places it among Asia’s strongest currencies, though not the absolute leader.
The Singapore dollar remains the region’s most stable, backed by its financial hub status, while the Japanese yen continues to serve as a safe-haven asset.
The timing of the yuan’s surge is significant. On May 14–15, Xi and Trump will meet in Beijing for talks expected to focus on trade, technology, and security.
Markets are watching closely: a conciliatory tone could accelerate yuan appreciation, while renewed tensions may trigger volatility.
Goldman Sachs forecasts the yuan could strengthen further to 6.50 per U.S. dollar within a year, provided trade relations stabilize.
Yet risks remain: a stronger currency could erode China’s export competitiveness, while geopolitical tensions in the Middle East may weigh on global demand.
The yuan’s ascent reflects China’s economic confidence and global trade power.
While not the region’s absolute strongest currency, its momentum positions it as a central player in Asia’s financial landscape.
The upcoming Xi–Trump summit may prove decisive, determining whether the yuan’s rally continues or faces new headwinds.
