The yuan rose to its highest level since 2023 amid a decline in the dollar following the Fed meeting

The yuan has strengthened to its highest level in more than three years against the U.S. dollar, driven by renewed weakness in the U.S. currency and continued policy support from Chinese authorities, according to Bloomberg.

On the domestic market, the yuan rose 0.1% during trading on Thursday, July 30, to 6.755 per dollar, reaching its highest level since February 2023. On the offshore market, the yuan also gained 0.1%, rising to 6.7523. The People’s Bank of China set the official exchange rate at 6.7892 per U.S. dollar, compared with 6.7899 the previous day.

These moves came after the Bloomberg Dollar Index posted its steepest decline in two weeks on Wednesday, July 29, following the Fed’s decision to keep interest rates unchanged, and traders scaled back their bets that the U.S. central bank would tighten monetary policy at its next meeting in September, Bloomberg notes.

The yuan remains the fastest-growing Asian currency thanks to Beijing’s efforts to attract foreign capital and strengthen its position in global markets, Bloomberg notes. The Chinese currency resumed its rise in July after weakening in June, when the U.S. dollar strengthened amid strong U.S. macroeconomic data and expectations that the Federal Reserve, under the leadership of Kevin Warsh, might adopt a more hawkish stance on monetary policy.

"We expect the yuan to continue to appreciate gradually, driven by China's strong export position and protectionist pressure from its trading partners," said Yang Wang, chief strategist for emerging markets and China at the research firm Alpine Macro.

This article was AI-translated and verified by a human editor