The yuan erased much of the year’s losses against the dollar as the latter retreated on bets for Federal Reserve rate cuts next month and as trades involving borrowing the yuan cheaply and selling it against a higher-yielding exchange rate were unwound. Analysts expect the PBOC to clamp down on any sharp yuan gains that could hurt exporters and impede economic recovery.
China set its daily reference rate for the yuan broadly in line with expectations for the first time in more than a year, signaling its comfort with current currency levels following a rebound.
The People’s Bank of China set the so-called fixing just seven pips away from the estimates in a Bloomberg survey of analysts and traders. The gap was the smallest since June 2023.
