SHANGHAI: The yuan inched higher against a firmer dollar on Wednesday, as persistently heavy demand for the Chinese currency dominated the market. Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate at 6.4831 per dollar, 11 pips firmer than the previous fix of 6.4842. In the spot market, onshore yuan opened at 6.4830 per dollar and was changing hands at 6.4823 at midday, 44 pips firmer than the previous late session close. Despite the marginal gains, traders said the Chinese yuan remained stuck in a very thin range as strength from heavy FX conversion into yuan from corporate clients and banks’ proprietary accounts offset the impact from the rising dollar, which is strengthening as investors wager a high US inflation reading later in the session could pressure the Federal Reserve to start withdrawing policy support soon.
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