China’s yuan steady as PBOC sets strongest fix in 32 months
- Spot yuan opened at 6.9530 per dollar and was last trading at 6.9499
SHANGHAI: The yuan was little changed against the US dollar on Friday after China’s central bank set its daily guidance at the strongest in 32 months, while the greenback firmed as markets awaited a White House nominee for Federal Reserve chair.
Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.9678 per dollar, its strongest since May 16, 2023 and 219 pips weaker than a Reuters estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
Spot yuan opened at 6.9530 per dollar and was last trading at 6.9499 as of 0257 GMT, 7 pips firmer than the previous late session close.
The yuan has strengthened 4% against the dollar in 2025 and is up 0.6% for the year to date. Recent gains owe much to exporters converting dollars to yuan to pay employee bonuses ahead of the Lunar New Year as is customary at this time of year.
Solid export fundamentals, self-reinforcing expectations of appreciation and a reduced sensitivity to the US dollar index have also helped the yuan, analysts at ITG Futures said in a note to clients.
Although Friday’s fix was relatively strong, Maybank analysts said in a note to clients that the central bank could continue to check the pace of yuan appreciation as domestic demand remains fragile and China is still grappling with deflation risks.
The dollar rose on Friday, paring its slide for the week, after US President Donald Trump said he would soon announce his nominee to head the Federal Reserve. Optimism that Washington will avert a government shutdown also helped the dollar.
Offshore yuan traded at 6.9476 yuan per dollar, down about 0.04% in Asian trade.
The dollar’s index, which measures the greenback against a basket of six currencies, was 0.415% higher at 96.58.
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