Yuan eases from 3-1/2-year peak as PBOC tempers appreciation pace

China's yuan weakened slightly from its 3-1/2-year peak against the US dollar on Monday, as the central bank guided the currency lower despite broad weakness in the greenback following eight straight weeks of gains. The yuan last traded 0.03% lower at 6.7238 per dollar, after hitting its strongest since February 2023 on Friday during an eight-week rally.

The People's Bank of China set the midpoint rate at 6.7841 per dollar, pulling back from Friday's strongest level in over three years and edging closer to the record deviation seen in February this year. Analysts suggest that the central bank wants to manage the pace of appreciation, with the yuan up 0.9% against the dollar this month and 4.0% firmer this year.

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