China moves to keep yuan in check as it gets stronger
China's central bank just stepped in to slow down the yuan's rise, setting its daily reference rate much lower than expected—its biggest move like this since early 2022.
Amid optimism over improved US-China relations, the People's Bank of China (PBOC) is making sure the currency doesn't get too strong, too fast.
Why is this happening?
The yuan is headed for its best year since 2020, boosted by a weaker US dollar and easing trade tensions—plus a recent call between US President Donald Trump and Chinese President Xi Jinping, which has increased optimism about improved ties.
Still, experts like Khoon Goh from ANZ say China wants a steady pace for any gains.
ING's Lynn Song adds that keeping things stable is key for China, and she doesn't see the yuan dropping below 7 per dollar this year.