FX.co ★ Offshore Yuan Hits Fresh 32-Month High

The offshore yuan appreciated to approximately 6.96 per dollar on Monday, achieving a new thirty-two-month peak, as investors evaluated China's recent significant economic indicators. Economic growth decelerated to its slowest rate in nearly three years during the fourth quarter, recording a 4.5% expansion compared to 4.8% in the third quarter. Nevertheless, it slightly surpassed market predictions of 4.4%. Annual growth also reached 5%, aligning with Beijing's target and mirroring the growth rate for 2024, buoyed by a record trade surplus as robust exports to markets outside the US counteracted pressures from US tariffs. Separate data from December indicated industrial production outperformed expectations, whereas retail sales and fixed asset investment fell short. Additionally, heightened year-end demand from exporters and the central bank's deliberate currency appreciation continued to bolster the yuan. A weaker US dollar provided additional support, as President Trump’s tariff threats against Europe increased demand for other safe-haven currencies.