Forex

Yuan set for strongest 1-day performance since March

| Updated on: Oct 12, 2015

China’s yuan firmed nearly 0.4 per cent on Monday, set for its strongest one-day performance since March, as traders followed stronger guidance from the central bank.

Expectations that the US Federal Reserve will delay raising interest rates, undermining the strength of the dollar, also supported the Chinese currency.

The People’s Bank of China set the midpoint rate at 6.3406 per dollar prior to the market open, firmer than the previous fix of 6.3493 and the previous day’s closing quote of 6.3453.

In the spot market, the yuan opened at 6.3387 per dollar but strengthened to 6.3260 in afternoon trade, 193 pips away from the previous close and 0.23 percent away from the midpoint.

The yuan hit its highest level since China abruptly devalued the currency by nearly 2 per cent on August 11.

That move roiled global markets for weeks, and policymakers had to scramble to contain fears that Beijing wanted the currency to depreciate even further to support weak exports.

The spot rate is allowed to trade with a range 2 per cent above or below the official fixing on any given day.

The offshore yuan was trading 0.11 per cent away from the onshore spot at 6.3189 per dollar.

Published on January 22, 2018

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