Yuan inches up after PBOC sets guidance at 30-month high
- Official data showed robust growth in profits at China's industrial firms in November, their seventh straight month of gains, supported by strong industrial production and sales, as manufacturers continue their recovery from the COVID-19 downturn.
SHANGHAI: The yuan inched higher against the dollar in thin trade on Monday, after China's central bank lifted its official guidance level to the highest in 30 months.
Currency market was quiet on Monday, with many overseas investors still on holiday, and domestic participants refrained from making huge bets on the Chinese unit during the last few trading days of the year.
Prior to market opening, the People's Bank of China (PBOC) set its official yuan midpoint to 6.5236 per dollar, 97 pips, or 0.14%, firmer than the previous fix of 6.5333, the strongest guidance since June 26, 2018.
In the spot market, onshore yuan opened at 6.5356 per dollar and was changing hands at 6.5303 at midday, 109 pips firmer than the previous late session close.
Traders said the official guidance came in line with market forecasts and lifted the spot market higher.
Sentiment across markets was supported as US President Donald Trump signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a partial federal government shutdown in the world's largest economy.
"The headline should provide a welcome boost to sentiment in Asia, which was likely to waiver today as Chinese authorities over the weekend told Ant Financial to go back to its core payments business," Jeffrey Halley, senior market analyst for Asia Pacific at OANDA, said in a note.
China's central bank has asked payments giant Ant Group Co Ltd to shake up its lending and other consumer finance operations, the latest blow to its billionaire founder and controlling shareholder Jack Ma.
Traders largely took solid economic data in stride.
Official data showed robust growth in profits at China's industrial firms in November, their seventh straight month of gains, supported by strong industrial production and sales, as manufacturers continue their recovery from the COVID-19 downturn.
The dollar index fell to 90.177 at midday, when the offshore yuan was trading at 6.5211 per dollar.
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