Market Highlight 25.11.2025

The Chinese yuan (CNY) has withstood the pressures of the trade war, slowing growth, record-low interest rates, and declining foreign investment in China, and is now on track for its strongest annual performance since the Covid-19 pandemic in 2020. The currency’s steady appreciation - tightly managed by the People’s Bank of China - signals Beijing’s pursuit of a broader strategy to promote the global use of the Renminbi. In 2018, when the CNY was regarded as a buffer for China’s economy during waves of U.S tariff hikes and depreciated by around 5%, the currency has strengthened nearly 3% in 2025. This comes after months of the PBOC consistently adjusting the daily fixing rate, while at the same time state-owned banks regularly purchased USD to limit volatility. Overall, China’s GDP growth remains stronger than expected despite escalating U.S trade actions.  

The People’s Bank of China’s decision to set a stronger-than-expected daily fixing since last November has drawn market attention amid lingering economic weakness. China’s policy rates remain far below U.S interest rates. Growth is constrained by subdued consumption and a capital-account deficit of USD 281 billion in the 10 months through October. The yuan’s resilience and elevated stability at a time of heightened market volatility provide Beijing with a compelling rationale to accelerate the currency’s internationalisation. The CNY is currently trading at 7,1068 per dollar at the start of this week and is projected to reach $7 by year-end and $6,85 in 2026.

The interbank USD/VND exchange rate rose by more than VND 20 yesterday, closing at 26.383, while the effective ceiling rate for the day stood at 26.401. The market is expected to ease slightly today and trade around 26.350.

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