Yuan holds steady as PBOC eases guidance, dollar firms

China’s yuan edged up in Asian trading on Wednesday, while the People’s Bank of China set its daily reference rate weaker at 6.7191 per dollar, its lowest level since October 22. The onshore currency gained 0.09% to 6.6746 per dollar, and offshore trading put it 0.04% higher at 6.6736.

Business Recorder reported that the central bank has shifted to softer daily guidance this month after a year of regularly setting stronger rates, a change traders and analysts view as managing the yuan’s pace of appreciation. The dollar remained near a two-week high as US inflation and Federal Reserve remarks strengthened expectations of a rate increase next month; futures pricing indicated a 91.9% chance of a 25-basis-point rise and 9.1% for a 50-basis-point move. Strong October exports and a sizable trade surplus were cited by Nanhua Futures analysts as support for the yuan’s longer-term appreciation trend.