Offshore RMB Surges Past 6.70, Hitting Four-Year High
HK01 · 2 SOURCESabout 3 hours ago5 MIN
Summary
The offshore renminbi (CNH) broke through the psychologically important 6.70 level against the US dollar on Friday, September 18, surging to 6.6968—a four-year high . The Chinese currency also climbed to multi-year peaks against the Hong Kong dollar, with the pair trading around 85.53 RMB per 100 HKD . The People's Bank of China's daily central parity rate was fixed at 6.7521, representing its strongest level since early February 2023 and extending an eight-consecutive-session winning streak . The currency has appreciated more than 4 percent since the start of the year, when it traded around the 7.0 level against the greenback .
Key Points
- Offshore RMB/CNH traded at 6.6968 versus the US dollar, the highest level in four years
- The RMB fetched approximately 85.53 HK dollars per 100 RMB, reaching a four-year peak
- PBOC set the central parity rate at 6.7521 per USD, up 59 pips from Thursday, the strongest since February 3, 2023
- The central rate has risen for eight consecutive trading days—the longest winning streak since 2023
- The US Dollar Index was hovering around 100 during Asian trading hours
Why It Matters
Despite record-wide inversion in US-China 10-year government bond yield spreads—with US Treasuries offering higher yields than Chinese bonds—ING Bank's Greater China Chief Economist Song Lin (宋林) attributed the RMB's strength to bullish appreciation expectations and robust export settlement flows . For Hong Kong, where the currency board system links the HKD to the USD, a strengthening RMB could reshape cross-border trade dynamics and influence capital flows between the two markets.
Market Analysis
The current rally is primarily supported by export settlement flows, reflecting foreign exchange market confidence in China's export competitiveness . Should the appreciation trend persist, Hong Kong's importers and manufacturers sourcing raw materials in foreign currencies will face mounting cost pressures. Market observers recommend closely monitoring US-China interest rate differentials and global economic recovery trajectories to adjust hedging strategies accordingly.
Despite record-wide inversion in US-China 10-year government bond yield spreads—with US Treasuries offering higher yields than Chinese bonds—ING Bank's Greater China Chief Economist Song Lin (宋林) attributed the RMB's strength to bullish appreciation expectations and robust export settlement flows . For Hong Kong, where the currency board system links the HKD to the USD, a strengthening RMB could reshape cross-border trade dynamics and influence capital flows between the two markets.
Market Analysis
The current rally is primarily supported by export settlement flows, reflecting foreign exchange market confidence in China's export competitiveness . Should the appreciation trend persist, Hong Kong's importers and manufacturers sourcing raw materials in foreign currencies will face mounting cost pressures. Market observers recommend closely monitoring US-China interest rate differentials and global economic recovery trajectories to adjust hedging strategies accordingly.