China's yuan hovers near 4-year high ahead of Fed decision

China’s yuan was almost steady against the dollar on Wednesday, trading at 6.6675 after a 0.01% decline. It remained close to the four-year peak of 6.6660 reached in the previous session, while the offshore yuan slipped about 0.02% to 6.666.

Business Recorder reported that currency traders were waiting for the Federal Reserve’s policy announcement, with markets generally expecting US rates to remain unchanged this week. Analysts at MUFG said attention would focus on policymakers’ guidance and whether inflation and higher energy costs leave room for further tightening, which could pressure Asian currencies. China’s central bank set the yuan midpoint at 6.7165 per dollar, 431 pips below a Reuters estimate; the daily trading band is 2% on either side. Manufacturing-related data also supported the currency: industrial profits rose faster than expected in September, led by computer, communication and other electronic equipment makers. The yuan has gained 0.6% against the dollar this month and 4.9% this year.