Yuan hovers near 3-1/2-year peak ahead of economic data

Business Recorder reported that the Chinese currency rose slightly on Wednesday, moving toward its highest level in roughly three and a half years against the US dollar. The yuan was last quoted at 6.7411 per dollar, close to the 6.74 peak reached last week, while the offshore rate stood at 6.7415. The move came as the central bank kept controlling how quickly the currency appreciates.

The dollar's six-currency index slipped 0.07 per cent to 99.52, near its weakest point this month, after US retail sales unexpectedly declined in July. That data reinforced expectations that the Federal Reserve would avoid a rate increase in September. Analysts at CICC said conditions for further dollar weakness were forming, though policy confirmation was still needed.

The central bank set the daily midpoint at 6.7873 per dollar, its strongest since February 8, 2023, but 491 pips weaker than a Reuters estimate, which traders read as deliberate restraint on the pace of gains. Industrial output and retail sales figures due later in the day will offer more clues on the health of the Chinese economy, which recorded a record contraction in July bank loans.