SHANGHAI: The yuan firmed against the dollar on Thursday, as the People’s Bank of China tightened its grip on the official daily fix and President Donald Trump showed some flexibility in reducing tariffs on China.
However, the outlook for the yuan remained bearish in the wake of rising headwinds, including from rising tensions with the US as Trump on Wednesday pressed on with new tariffs on all auto imports.
Prior to the market opening, the PBOC set the midpoint rate , around which the yuan is allowed to trade in a 2% band, at 7.1763 per dollar, 965 pips firmer than a Reuters’ estimate, marking the largest gap in over three weeks.
Analysts at Bank of America maintained a bearish yuan outlook due to tariff risks but adjusted their second-quarter forecast to 7.5 per dollar from 7.6, as the PBOC continued to set a stronger-than-expected daily fix.
Elsewhere, Trump said on Wednesday he would be willing to reduce tariffs to get a deal done with TikTok’s Chinese parent ByteDance to sell the
short video app used by 170 million Americans.
Comments
Comments are closed for this article.