SHANGHAI: China’s yuan held steady on Tuesday as investors waited for news from a closed-door meeting of top leaders who will discuss economic targets and map out stimulus plans for 2024.
The annual Central Economic Work Conference (CEWC), during which President Xi Jinping and other top officials chart the course for the world’s second-largest economy, began on Monday and is likely to end on Tuesday, the sources said.
Specific targets are typically not revealed until early the next year, but investors are looking for clues on how the government plans to boost the sputtering economy and reverse a deepening property crisis.
As for the new economic growth target, consensus expectations are centred on a repeat of this year’s goal of “around 5%”, which will require continued policy support given the current economic conditions, said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
“But it would also emphasise that Beijing remains wedded to targeted support policies rather than large-scale stimulus measures to revive the economy more powerfully,” Tan said.
Investors are also awaiting a crucial US inflation report later in the day that could influence the Federal Reserve’s policy path, amid growing views it will start to cut interest rates early next year which will affect the yuan-dollar dynamics.
Prior to the market’s opening, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1174 per US dollar, 11 pips weaker than the previous fix 7.1163.
The spot yuan opened at 7.1738 per dollar and was changing hands at 7.1766 at midday, only 16 pips weaker than the previous late session close.
The offshore yuan was trading 102 pips weaker than the onshore spot at 7.1868 per dollar, after touching its weakest level in three weeks in late Monday session.
Hedge funds sold the offshore yuan in the New York session on Monday and were the most active client segment in broader Asia FX, analysts at Citi said.
The global dollar index fell to 103.973 from the previous close of 104.095.
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