Yuan set for 7th straight quarterly gain as exporters sell dollars before holiday

According to Business Recorder, the Chinese yuan strengthened against the US dollar on Wednesday and was on course for a seventh consecutive quarterly rise. Exporters accelerated the sale of their dollar balances for yuan, while upbeat factory figures for September boosted market sentiment before the National Day break.

The currency has trended higher since late 2023, supported by robust shipments, foreign exchange settlement flows and a broader weakness in the dollar. Spot prices began the session at 6.7050 per dollar and stood at 6.7047 by 0221 GMT, 18 pips above the previous late-session close. ICBC International analysts said settlement flows have been the main force behind the currency's gains this year.

The People's Bank of China fixed its midpoint at 6.7351 per dollar, the firmest reading since February 2, 2023, which sat 326 pips below a Reuters estimate. Onshore trading is scheduled to resume on October 8 after the week-long holiday that starts Thursday. Data pointed to a return to expansion in manufacturing during September, helped by weather conditions improving so plants could restart. UBS economists asked in a note whether the measures are just a starting point, with bigger steps still to follow.