Yuan hits strongest level since July 2022 as most Asian currencies rise
Key Facts
China's offshore yuan reached its strongest level against the dollar since July 2022 during Tuesday's session as most Asian currencies rose, according to Investing.com. The dollar fell to a session low of 6.6775 yuan against the offshore currency, marking the Chinese currency's most prominent move in the day's trading. The website linked the yuan's rise to the strong daily reference fixing set by the People's Bank of China, alongside Chinese economic data. The central bank set the reference rate at 6.72 yuan per dollar on October 20, 2026, according to Radio Television Hong Kong. The reference rate was 8 pips stronger than the level set the previous day, the broadcaster said.
In the broader currency market, the dollar index fell 0.2% during Tuesday's session, according to Investing.com, reversing its rise in the previous session. The decline took the index to 101.78 points as gains in Asian currencies extended to the South Korean won. The dollar index had risen 0.2% to 101.98 points on Monday, according to Reuters, before reversing direction in Tuesday's trading. The dollar fell 0.42% against the won to 1,326.51 won per dollar, according to Investing.com, as the South Korean currency strengthened against its U.S. counterpart. The Indian rupee, meanwhile, was little changed during the same session, diverging from the gains recorded by most regional currencies.
The Chinese currency's move followed an announcement by China's National Bureau of Statistics on October 19 that annual gross domestic product growth accelerated to 4.5% in the third quarter from 4.3% in the second quarter. On a quarter-on-quarter basis, GDP grew 1.2% in the third quarter, according to the bureau's statement on China's economic performance. Real economic growth in January–September 2026 reached 4.6% compared with the same period a year earlier. In industrial activity, value-added output at industrial enterprises above the designated size rose 5.5% year on year in September, according to the bureau. Growth in that activity accelerated by 0.3 percentage points from the previous month.
On consumption, China's retail sales of consumer goods rose 1.1% in September from the same month a year earlier, according to the National Bureau of Statistics. Retail sales growth accelerated by 0.7 percentage points from the previous month, alongside faster industrial growth during the same month. On investment, fixed-asset investment, excluding rural households, fell 7.2% year on year during the first three quarters of 2026. Investment in property development declined 20.6% over the same period from a year earlier, according to the official statement on economic activity. The bureau warned that "the problem of weak domestic demand remains prominent," despite faster growth in the economy, industry and retail sales.
On lending, China kept its one-year loan prime rate at 3.00% in October 2026, according to Reuters, coinciding with the stronger reference fixing for the Chinese currency. The five-year loan prime rate remained unchanged at 3.50%, the agency reported, with both rates held at their previous levels. That extended China's loan prime rate hold to 17 consecutive months as the offshore yuan reached its strongest level since July 2022. Commenting on currency market moves, Chris Weston, head of research at Pepperstone, told Reuters that "currency markets reflected an improvement in risk appetite." He added that "higher-yielding currencies found buyers," linking improved risk appetite to demand for those currencies.
In its assessment of the economic outlook, China's National Bureau of Statistics said the foundation for economic recovery and continued improvement still needed strengthening, following its warning about weak domestic demand. The bureau said the next phase required efforts to enhance the effectiveness of macroeconomic policies, among the priorities for supporting economic activity outlined in its statement. It also called for greater efforts to expand domestic demand as investment declined despite retail sales growth in September. The bureau's priorities included improving supply, alongside expanding demand and strengthening the impact of macroeconomic policies in the coming phase. On the U.S. monetary policy calendar, the Federal Reserve holds its next meeting on October 27–28, 2026, according to the Federal Open Market Committee's official calendar.