China's yuan hits three-year high days before Xi-Trump summit
China's onshore yuan rose to a three-year high of 6.98 per dollar on Monday. Strong April exports and a wide trade surplus drove the move just two days before Trump's state visit.
China's yuan rose to a three-year high against the dollar on Monday, just two days before Donald Trump's state visit to Beijing. The onshore rate touched 6.98 per dollar in Shanghai, helped by stronger-than-expected April exports, an upbeat trade surplus and central bank guidance that traders read as a green light for further appreciation. Hong Kong's offshore yuan moved in line, briefly trading at 6.97.
Investors believe Beijing is signalling stability ahead of the summit, where Iran, Taiwan and tariffs dominate the agenda. The People's Bank of China set its daily fixing at the strongest level since 2022, and state banks were seen selling dollars in Shanghai. A firmer yuan also softens the effect of higher import bills for oil and food.
Asian currencies followed higher, with the Korean won and Singapore dollar gaining. Equity markets in Shanghai, Tokyo and Mumbai opened in positive territory, with the KOSPI extending a record run on AI chip demand. Strategists warned, however, that any breakdown in the Trump-Xi talks could trigger a sharp reversal, given how concentrated speculative positions have become around the summit week.
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