China's Yuan Reaches 15-Month High Against USD

Currency Strengthens Amid Global Dollar Weakness

The Chinese yuan appreciated to its highest level in 15 months against the US dollar on December 23, 2025, driven by a broader weakening of the greenback in global markets ¹

. This currency movement comes despite the People's Bank of China (PBOC) setting the daily yuan reference rate weaker than market expectations, indicating the central bank's cautious stance on the currency's appreciation ²

Source 2

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Significant Annual Gain

The yuan's recent strength has been notable, with the currency appreciating over 3.8% so far this year. This performance positions it for its largest annual gain since 2020, marking a significant recovery in the Chinese currency's value ¹

. The PBOC's careful management of the yuan, including the recent fixing decision, reflects a balanced approach between allowing currency appreciation and maintaining economic competitiveness.

Market Implications

The yuan's strengthening is occurring alongside a global decline in the US dollar's value, creating a favorable environment for other currencies to appreciate. China's currency management strategy, including the use of daily reference rates, continues to play a crucial role in shaping market expectations and guiding the yuan's movement.