China’s yuan hits four-year high as exports and inflows lift demand

China’s onshore yuan reached its strongest level against the US dollar in more than four years on Wednesday, October 21, touching 6.6765 per dollar in morning trading. It subsequently eased to 6.6791 by 0250 GMT, according to Economic Times Markets, which cited agency inputs.

The session high was the currency’s strongest reading since June 28, 2022. The yuan has appreciated 4.7% against the dollar so far in 2026, including a 0.4% gain this month, supported by export strength, foreign exchange inflows and a softer US currency.

Export earnings support demand for yuan

China’s third-quarter economic growth surpassed expectations as strong exports helped offset restrained consumer spending. That combination points to continued economic resilience, but also to lingering weakness in domestic demand.

Analysts at Caitong Securities attributed the yuan’s upward trend to resilient activity, capital inflows and greater corporate demand to exchange foreign currency earnings for yuan.

Goldman Sachs estimated net foreign exchange inflows into China at $50 billion in September. The share of foreign currency receipts converted into yuan increased to 66%, from 63% in August—a rise of three percentage points.

Caitong’s analysts nevertheless cautioned that appreciation could slow. Geopolitical uncertainty could bolster the dollar and slightly curb capital inflows, they said.

Central bank strengthens fixing, but trails market estimate

The People’s Bank of China set Wednesday’s daily midpoint at 6.7192 yuan per dollar, its strongest fixing since February 2, 2023. The central bank has gradually moved that reference rate stronger alongside the currency’s advance.

However, the fixing was still 413 pips weaker than a Reuters estimate. The onshore yuan is permitted to trade within 2% on either side of the daily midpoint, making the reference rate distinct from the exchange rate actually quoted in the market.

Dollar weakness provides a further lift

The dollar remained subdued after reaching a three-week low in the previous session. Lower US Treasury yields and weaker oil prices were cited as factors reducing its appeal.

The offshore yuan stood at 6.6786 per dollar, down about 0.05%, while the dollar index—a measure against six major peer currencies—was at 101.77. These figures are a source-reported market snapshot, not live exchange-rate quotes.