FX.co ★ Yuan Holds Firm Ahead of Key Economic Meeting

The offshore yuan maintained stability around 7.07 against the US dollar, hovering near its highest level in a year. Market participants are keenly awaiting insights from the upcoming Central Economic Conference, which will provide guidance for policy direction in 2026. During this key economic summit, Beijing is anticipated to set the priorities for the coming year for the world’s second-largest economy, focusing on building resilience amidst escalating strategic tensions with the United States. This is evident in China’s efforts to diminish its reliance on foreign technology. Concurrently, investors will be attentive to any indications from policymakers on addressing internal challenges. The Politburo has recently emphasized the necessity to stimulate demand, as the ongoing real estate sector downturn and a sluggish labor market continue to impact economic activity. While recent economic indicators show mixed results—with growth surpassing expectations and exports remaining resilient despite US trade tensions—deflationary pressures persist, and both business and consumer confidence remain low.