China sets yuan midpoint at strongest level since February 2023

The People’s Bank of China has set the yuan midpoint at its strongest level since February 8, 2023, aiming to maintain a firmer currency against the US dollar. This adjustment follows a trend since January 2026, when the midpoint reached a 32-month high. The USD/CNY exchange rate is currently between 6.75 and 6.78, indicating a stronger yuan compared to earlier in the year when rates were closer to 6.89–7.00 per dollar. Market observers suggest this move may be part of China’s strategy to manage inflation and influence global trade dynamics. Key Takeaways This development appears to support a stronger yuan, suggesting potential impacts on global currency markets. Markets may interpret a firmer yuan as indicative of China’s efforts to control inflation and stabilize its economy. Pricing suggests a possible ripple effect on commodities, including gold, due to the potential impacts on inflation expectations and the US dollar’s strength. What to Watch Observers will focus on further actions by the People’s Bank of China and any subsequent effects on the USD/CNY exchange rate. Key indicators may include inflation data from China and the US, as well as announcements from major central ba...