Yuan holds near 3-1/2-year peak as central bank slows gains
HONG KONG: China’s yuan held near a 3-1/2-year peak against the dollar on Tuesday , as the central bank continued to slow the pace of appreciation after two months of gains. The central bank has been gradually setting its daily guidance at levels increasingly weaker than market expectations, a signal that the authorities want to cap further gains after a 4% year-to-date rally, market participants…
China's yuan neared a three-and-a-half-year high against the US dollar on Tuesday, after the central bank began to ease the pace of appreciation following two months of gains. The People's Bank of China set the midpoint rate at 6.7809 per dollar, the strongest level in nearly two weeks, but the yuan traded at 6.7210 per dollar, down about 0.05% in Asian trade.
Market participants noted that the central bank's gradual guidance had signaled a desire to cap further gains after a 4% year-to-date rally. With consumer spending tepid and the property sector still in decline, China's economy has become more reliant on factories and foreign demand. However, this shift has raised concerns among trading partners about an overabundance of Chinese goods flooding overseas markets.
US Treasury Secretary Scott Bessent mentioned on Sunday that he would urge G20 members to review trade terms with China and push Beijing towards a more balanced economy, less dependent on exports. Analysts at CMB International stated that the yuan might face near-term pressure, citing the persistent volatility leading up to the US nonfarm payrolls report on Friday.
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