SHANGHAI: China’s yuan inched lower against the dollar on Monday, not far from a key threshold, as markets await a string of US economic data that could delay prospects for a Federal Reserve rate cut.
Markets are paying close attention to US core personal consumption expenditures price index - the Fed’s preferred measure of inflation - due later this week for more clues on the trajectory of monetary policy in the world’s largest economy, traders said.
Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1080 per dollar, 16 pips weaker than the previous fix of 7.1064.
The central bank continued its months-long practice of setting the official guidance at levels firmer than market projections, widely viewed by traders as an attempt to keep the currency stable.
Monday’s midpoint was 918 pips firmer than a Reuters estimate of 7.1998.
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