Yuan eases from 3-1/2-year peak as PBOC tempers appreciation pace

Business Recorder reported that China's yuan eased slightly on Monday from a peak against the US dollar not seen in three and a half years, as the People's Bank of China steered the currency weaker. The spot rate slipped 0.03% to 6.7238 per dollar, after hitting its loftiest mark since February 2023 last Friday and capping an eight-week run of gains.

Before the session opened, the central bank set its midpoint at 6.7841 per dollar, a retreat from Friday's firmest fixing and 593 pips weaker than a Reuters estimate. That gap is close to the record deviation recorded in February this year. Spot trades are capped at 2% either side of the midpoint each day.

Traders and analysts said the central bank has nudged its daily guidance higher, but at levels below market forecasts, signalling a wish to slow appreciation. CICC analysts said the midpoint would keep climbing at the present managed rate, which they see as keeping currency expectations steady. The yuan has gained 0.9% this month and 4.0% this year, while the dollar's six-currency gauge hovered at 98.82, not far from multi-month lows, after a US Treasury plan to buy older long-dated bonds revived dollar-debasement trades.