FINANCE

Yuan Breaks Past 6.8 as Investors Shift Away From Dollar Assets

Published: May. 7, 2026 10:10 p.m. GMT+8

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The onshore yuan rose 134 basis points on Thursday from the previous session to close at 6.8015, its strongest daytime level since mid-February 2023. Photo: VCG

China’s offshore yuan strengthened past the psychologically important 6.8-per-dollar mark Thursday, reaching its highest level since mid-February 2023.

The currency’s strong performance reflects a broader shift in global capital flows as investors and Chinese exporters diversify away from U.S. dollar assets amid geopolitical tensions and uncertainty surrounding the Federal Reserve’s leadership transition. The trend is creating an opening for China to push forward the internationalization of the yuan.

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Offshore yuan topped 6.8/USD, highest since mid-Feb 2023; onshore closed at 6.8015, up 134 bps.
Yuan gained 1.2% onshore, 1.1% offshore since March vs stable DXY; CFETS index rose 1.6% to 100.2.
March FX surplus $16B, forwards $187.8B; experts see yuan potential amid dollar pressures.

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Who’s Who

Huatai Securities Co. Ltd.: Yi Huan, chief macroeconomist at Huatai Securities Co. Ltd., noted Chinese exporters have accumulated substantial foreign assets, overallocating to the dollar over the past decade. Persistent expectations for a stronger yuan indicate potential for cross-border capital return. Medium-term, the dollar faces inflation/geopolitical pressures, while the yuan benefits from global diversification and past undervaluation (2022-2025).

FTSE Russell: Yan Yan, co-head of Asia-Pacific equities and multi-asset index at FTSE Russell, stated that capital is shifting from the U.S. to other regions for diversification. Asia-Pacific markets, particularly China, offer investment opportunities due to attractive valuations, independent long-term growth, and sufficient market depth to absorb inflows.

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