Reuters said traders read China’s weaker-than-forecast yuan fixing as a signal to pace appreciation, even as the onshore rate touched its strongest level since June 7, 2022.
The China Foreign Exchange Trade System (CFETS), authorized by the People’s Bank of China (PBOC), announced a central parity of 6.7147 yuan per dollar for Oct. 29. The previous business day’s setting was 6.7165. Reuters put its estimate at 6.6596 and reported that the published fixing was 551 pips weaker, the largest weak-side gap since Sept. 15.
Separately, Reuters reported that the onshore yuan touched 6.6620 per dollar during the session and was quoted at 6.6621 at 10:35 p.m. ET Wednesday (02:35 UTC Thursday). Reuters said the 6.6620 level was the currency’s strongest since June 7, 2022.
The daily parity sets the boundaries for onshore spot trading: PBOC rules allow the rate to move within 2% above or below the benchmark. CFETS says its formula weighs movements in major currencies and the prior interbank close, along with foreign-exchange supply and demand, using quotes market makers submit before trading opens. Reuters cited traders and analysts who saw the weaker benchmark as evidence that officials were comfortable with a stronger yuan but favored a controlled pace of change.
Reuters’ calculations based on official data put the CFETS currency-basket index at 103.75, its highest level since July 15, 2022. The yuan had gained about 5.9% against that basket year to date, Reuters reported.
The Federal Open Market Committee voted 10-2 on Oct. 28 to keep its federal funds target range at 3.75% to 4%. Two members favored a 25-basis-point increase, and the committee said inflation remained elevated.
EconoTimes previously covered the yuan’s earlier four-year high and updated current-account forecasts for China.
The European Central Bank scheduled its policy announcement for 9:15 a.m. ET Thursday (13:15 UTC), followed by a news conference at 9:45 a.m. ET (13:45 UTC).
