Over the past week the offshore yuan (CNH) strengthened sharply—reaching near 6.98 per USD—while the PBOC signalled liquidity easing through RRR and rate moves but reiterated a policy of keeping the renminbi "basically stable." Strong PMI prints and calls for a more market-driven yuan have pushed appreciation expectations, forcing careful central-bank management and creating clear trading opportunities and risks for USD/CNY and CNH positions.

This article explains concrete drivers behind recent CNY strength: CFETS annual basket reweighting, the PBoC’s stronger daily fixing, policy tolerance for modest appreciation, interest-bearing e-CNY deposit changes, and a rebound in factory activity. Each development is examined for how it directly affects the onshore and offshore exchange rate.

Concrete PBOC measures last week — a one‑time credit repair program and steady LPRs — combined with rising yuan-denominated overseas lending and modest onshore appreciation to support CNY. Traders should watch CNH-CNY spreads, PBOC fixes and property data for near-term direction.

This article examines last-week moves in the Chinese yuan: modest onshore appreciation in the PBOC central parity, an early-month CNH rally, expansion of the China–Macao swap line, a record trade surplus, and renewed property-sector stress from Vanke — and explains how these concrete events are shaping the CNY exchange rate.

China’s state-owned banks intervened in early December by buying dollars to slow the yuan’s rapid appreciation, while mixed domestic inflation data and IMF pressure on export reliance complicate the currency outlook. A Fed rate cut softened the dollar, but Beijing’s tactical dollar purchases and persistent producer deflation point to a cautious, managed yuan path.

Over the past week the Chinese yuan strengthened to about 7.07 per USD, supported by softer U.S. dollar sentiment amid Fed-cut expectations and resilient Chinese exports. This article explains the concrete drivers behind the move, policy signals to watch, and practical implications for FX traders and corporate treasuries.