HONG KONG: China’s yuan held steady against the US dollar on Wednesday, with markets awaiting signals from Beijing’s ongoing policy meeting and progress in trade negotiations with Washington.
The People’s Bank of China set the midpoint rate at 7.0954 per dollar, slightly off from the one-year peak seen on Tuesday, but still 271 pips firmer than a Reuters’ estimate.
The spot yuan is allowed to trade to a maximum of 2% on either side of the fixed midpoint each day. China has been fixing the yuan midpoint below 7.10 after returning from the Golden Week holiday, showcasing confidence as the ruling Communist Party holds its Fourth Plenum this week, DBS analysts said in a note to clients.
“President Xi Jinping also reasserted authority over the military and projected stability ahead of the plenum and a possible meeting with US President Donald Trump,” DBS said.
Investors are awaiting details from the plenum on the government’s economic, political and social agenda, as well as development plans for the next five years.
Investors are also focused on a meeting in Malaysia between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, which could help ease trade tensions and pave the way for a potential meeting between Trump and Xi later this month.
By 0308 GMT, the yuan was 0.02% higher at 7.1236 to the dollar after trading in a range of 7.1200 to 7.1255.
Spot yuan CNY=CFXS opened at 7.1200 per dollar and was last trading 14 pips firmer than the previous late session close and 0.4% weaker than the midpoint.
The offshore yuan traded at 7.1254 yuan per dollar, up about 0.03% in Asian trade.
The official trade-weighted CFETS index rises to 97.5, highest level since April 10.
The dollar’s six-currency index weakened 0.1% to 98.87 after three consecutive days of gains, as a tumble in gold prices triggered a rebalancing across various safe-haven assets.
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