Offshore yuan hits recent high above 7.20 on solid macro fundamentals.

On May 5,Regular futures platform query the offshore Chinese yuan continued to strengthen against the US dollar, at one point breaking the 7.20 mark, reaching its highest level since December 2024. Amid heightened global market volatility, the yuan demonstrated strong resilience, garnering widespread market attention.

According to Wind data, as of 5 p.m. on May 5, the offshore yuan was reported at 7.2065 per dollar, peaking at 7.1891 during the session, surpassing the 7.20 barrier, and setting a new high for the year. Experts believe this round of yuan appreciation is primarily supported by China's continued stable macroeconomic performance and proactive policy measures to prevent excessive exchange rate fluctuations.

Meanwhile, the US dollar index weakened for the second consecutive trading day, dropping below the 100 mark. At the same time, the dollar index was reported at 99.69, further signaling a weakening dollar, which provides external room for the yuan's exchange rate to rise.

Market participants point out that the current yuan exchange rate remains stable within a reasonable and balanced range, reflecting the continued improvement of domestic fundamentals and the effective guidance of regulators in managing cross-border capital flows and exchange rate expectations.

Additionally, some suggest that the onshore yuan may exhibit a catching-up trend in subsequent trading days to align more closely with the offshore market. Driven by the weakening dollar and a warming market risk appetite, the attractiveness of yuan assets is expected to further increase.

Looking ahead, if external disturbances do not significantly intensify and China's economy continues its stable progress, the yuan's exchange rate is expected to maintain relative strength around the 7.20 level, continuing its phase of appreciation.

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