China's yuan inches higher as PBOC sets firmer guidance

China’s yuan edged up against the US dollar on Thursday after the People’s Bank of China set its daily reference rate stronger than the previous session’s level, Business Recorder reported. The onshore currency gained 0.1% to 6.6684 per dollar by 0323 GMT, having moved between 6.6667 and 6.6718. The central bank fixed the midpoint at 6.7174, which was 377 pips weaker than a Reuters estimate but firmer than Wednesday’s 6.7191.

The currency’s rise was restrained by a stronger US dollar and increased market expectations of further Federal Reserve rate increases following stronger-than-expected October inflation data. China’s export strength and corporate foreign-exchange settlements support the yuan, while authorities have introduced measures to temper its advance and limit pressure on exporters’ margins. The yuan has fallen 0.2% against the dollar this month but remains 4.9% stronger for the year; offshore trading put it at 6.6678 per dollar, up about 0.09%.