61% of the dollars companies receive are still sitting on their books. They haven’t been converted into yuan. And right at this moment, the yuan keeps strengthening. Yesterday it broke through 6.68, setting a four-year high for five consecutive trading days.
First, look at three rates. On October 21, the yuan’s central parity rate against the dollar was 6.7192, the onshore rate was 6.6781, and the offshore rate was 6.6773. Of the three, the central parity rate was the highest—more than 400 basis points above the market trading rate.
Those 400-plus basis points are evidence of someone tapping the brakes. Left to its own devices, the market would push the yuan even stronger. The authorities nudged the guidance rate back down. They held it in place—but the market didn’t fully listen.
A lot of people think this round of appreciation is because foreign investors are rushing to buy yuan assets. That was my first thought too. But the numbers don’t add up. From the second quarter of 2025 to the second quarter of this year, foreign securities investment saw average net outflows of $16.5 billion per quarter. Every quarter. The money simply wasn’t coming in.
It wasn’t driven by Fed rate cuts, either. The nominal yield gap between ten-year U.S. and Chinese government bonds is still inverted by 360 basis points, so the stated returns on dollar assets are clearly higher. By the textbook, the yuan should be weakening. The market puts the odds of the Fed holding rates steady at its October meeting at 93.5%. Interest rates don’t explain this move.
The real change is on the dollar-buying side. Companies haven’t been rushing to convert their dollars into yuan: the foreign-exchange settlement rate was 61.5% in August, more than two percentage points below the average for the first seven months. What changed was the other side. People buying dollars pulled back first—and decisively. During the previous period of yuan depreciation, the average rate of foreign-exchange purchases for payments was 55%. This August it fell to 47%. When paying for imports, companies simply use the foreign currency they already have on their books instead of buying it from the bank. And with dollar financing costs high, borrowing dollars and then converting them back into yuan just doesn’t pencil out.
There are fewer buyers, but the pressure to depreciate has also eased. Sometimes an exchange rate gets support because nobody is buying anymore. The rush to buy? It never came.
The other half of the support comes from the trade surplus. In September, the monthly trade surplus reached $133.5 billion, up 50% year on year. There’s something solid behind that figure: exports of integrated circuits and computers more than doubled year on year, contributing 13 percentage points to overall export growth. The money earned by the AI supply chain ultimately became dollar supply at bank counters.
The anchor for pricing has shifted to exports. The interest-rate rope no longer holds.
For the crypto market, this matters in two ways.
First, your account balance. The gains you see on an exchange are denominated in dollars. When the yuan strengthens, the same dollar-denominated asset converts back into fewer yuan. Bitcoin might rise 10%, but after converting it back, you might be left with only 5% or 6%. On the way down, the exchange rate can cushion the fall a little. There’s no mystery to it. It’s just two different units of account.
Second, the conversion rate. For $10,000, there’s a difference of 413 yuan between the official guidance rate and the rate you can actually get in the market. If you convert USDC back outside the banking system, you’re using the market rate. The guidance rate will always be less favorable than the rate you can actually get.
The yuan keeps rising. Should you convert all your crypto into yuan? That’s actually the wrong question. The question to ask is: what currency will you spend in the future? If all your expenses are in yuan but your assets are dollar-denominated, that’s a mismatch. Exchange-rate moves don’t create it; they just widen or narrow the gap. You may not notice it until the day you actually need to spend the money.
Here are two things you can check. Caitong Securities has calculated a lower bound for one scenario: 6.56, assuming the U.S. dollar index stops weakening. Change that assumption, and the number has to be recalculated. Nobody can say for sure. The other indicator is more straightforward: check whether next month’s central parity rate is still weaker than the market rate. If the authorities keep nudging it back down, that means they still don’t want the yuan to appreciate too quickly.
Some people still think exchange rates are just a macroeconomic issue, with nothing to do with their own wallets. They’ll see it for the first time on the day they convert their money back.
#美联储 #比特币 #币安广场 $BTC $USDC $SPYB
First, look at three rates. On October 21, the yuan’s central parity rate against the dollar was 6.7192, the onshore rate was 6.6781, and the offshore rate was 6.6773. Of the three, the central parity rate was the highest—more than 400 basis points above the market trading rate.
Those 400-plus basis points are evidence of someone tapping the brakes. Left to its own devices, the market would push the yuan even stronger. The authorities nudged the guidance rate back down. They held it in place—but the market didn’t fully listen.
A lot of people think this round of appreciation is because foreign investors are rushing to buy yuan assets. That was my first thought too. But the numbers don’t add up. From the second quarter of 2025 to the second quarter of this year, foreign securities investment saw average net outflows of $16.5 billion per quarter. Every quarter. The money simply wasn’t coming in.
It wasn’t driven by Fed rate cuts, either. The nominal yield gap between ten-year U.S. and Chinese government bonds is still inverted by 360 basis points, so the stated returns on dollar assets are clearly higher. By the textbook, the yuan should be weakening. The market puts the odds of the Fed holding rates steady at its October meeting at 93.5%. Interest rates don’t explain this move.
The real change is on the dollar-buying side. Companies haven’t been rushing to convert their dollars into yuan: the foreign-exchange settlement rate was 61.5% in August, more than two percentage points below the average for the first seven months. What changed was the other side. People buying dollars pulled back first—and decisively. During the previous period of yuan depreciation, the average rate of foreign-exchange purchases for payments was 55%. This August it fell to 47%. When paying for imports, companies simply use the foreign currency they already have on their books instead of buying it from the bank. And with dollar financing costs high, borrowing dollars and then converting them back into yuan just doesn’t pencil out.
There are fewer buyers, but the pressure to depreciate has also eased. Sometimes an exchange rate gets support because nobody is buying anymore. The rush to buy? It never came.
The other half of the support comes from the trade surplus. In September, the monthly trade surplus reached $133.5 billion, up 50% year on year. There’s something solid behind that figure: exports of integrated circuits and computers more than doubled year on year, contributing 13 percentage points to overall export growth. The money earned by the AI supply chain ultimately became dollar supply at bank counters.
The anchor for pricing has shifted to exports. The interest-rate rope no longer holds.
For the crypto market, this matters in two ways.
First, your account balance. The gains you see on an exchange are denominated in dollars. When the yuan strengthens, the same dollar-denominated asset converts back into fewer yuan. Bitcoin might rise 10%, but after converting it back, you might be left with only 5% or 6%. On the way down, the exchange rate can cushion the fall a little. There’s no mystery to it. It’s just two different units of account.
Second, the conversion rate. For $10,000, there’s a difference of 413 yuan between the official guidance rate and the rate you can actually get in the market. If you convert USDC back outside the banking system, you’re using the market rate. The guidance rate will always be less favorable than the rate you can actually get.
The yuan keeps rising. Should you convert all your crypto into yuan? That’s actually the wrong question. The question to ask is: what currency will you spend in the future? If all your expenses are in yuan but your assets are dollar-denominated, that’s a mismatch. Exchange-rate moves don’t create it; they just widen or narrow the gap. You may not notice it until the day you actually need to spend the money.
Here are two things you can check. Caitong Securities has calculated a lower bound for one scenario: 6.56, assuming the U.S. dollar index stops weakening. Change that assumption, and the number has to be recalculated. Nobody can say for sure. The other indicator is more straightforward: check whether next month’s central parity rate is still weaker than the market rate. If the authorities keep nudging it back down, that means they still don’t want the yuan to appreciate too quickly.
Some people still think exchange rates are just a macroeconomic issue, with nothing to do with their own wallets. They’ll see it for the first time on the day they convert their money back.
#美联储 #比特币 #币安广场 $BTC $USDC $SPYB