Renminbi Trend | CNY closes at a more than three-year high

The onshore yuan-to-dollar exchange rate (CNY) closed at a level that hit its highest in more than three years, while the central parity rate also touched a level close to a three-year high.

The onshore yuan-to-dollar exchange rate closed at 6.8274, compared with 6.8597 at 4:30 pm the previous day, up 323 pips, an increase of 0.47%, setting a more-than-3-year high.

As of 6:13 pm Hong Kong time, the offshore rate (CNH) was 6.8299, while the onshore rate was 6.8303.

The yuan central parity rate was 6.868, up 174 pips from the previous day, and it touched a level near a three-year high.

Market participants said that as the U.S. and Iran press the “pause” button on the war, market risk appetite quickly rebounded. International oil prices fell sharply, risk assets rebounded noticeably, and the market’s response to the positives under extreme conditions was active. The yuan followed suit, extending its upward move, and in the short term it may return to the upward trend seen before the U.S.-Iran outbreak of war.

A report from ING Bank said that during the market turbulence in March, the People’s Bank of China steadied the yuan exchange-rate trend, and today it sent signals encouraging yuan strength through the central parity rate. The market speculated that this move could be aimed at boosting domestic demand via a strong yuan, and it might also be intended to enhance the yuan’s position as a more stable currency.