Yuan Hits 3.5-Year High as PBOC Eases Grip Ahead of Trump-Xi Summit

China's yuan strengthened to 6.6957 per dollar on September 21, 2026, its strongest level since January 16, 2023, after the People's Bank of China set a firmer midpoint, signaling reduced resistance to currency appreciation before the Trump-Xi summit on September 24. The PBOC fixed the midpoint at 6.7487 per dollar, the strongest since February 3, 2023, but 536 pips weaker than Reuters estimates. The offshore yuan traded at 6.6946, up 0.03% in Asian trade. The central bank has narrowed its midpoint gap with market expectations this month after it hit the widest level since February. Goldman Sachs said the PBOC's approach ahead of the summit aligns with recent precedent, creating room for further offshore gains. OCBC cautioned that recent appreciation may reflect policy-managed stability rather than a fundamental re-rating, citing wide US-China yield differentials and soft domestic fundamentals. The dollar index held steady at 100.23 after gaining over 1% last week following the Federal Reserve's hawkish hike.