Yuan edges lower in tight range as pre-holiday flows ebb

SHANGHAI: China’s yuan edged lower against the US dollar on Thursday, keeping to tight ranges, as traders said exporters’ rush to convert faded ahead of the Lunar New Year and authorities leaned against one-way bets on the currency.

The spot yuan opened at 6.9449 per dollar and was last trading at 6.9458 as of 0321 GMT, 8 pips lower than the previous late session close.

“With Lunar New Year approaching, client FX conversion has dropped noticeably; the next moves will hinge on overseas markets during the holiday,” said a trader at a Chinese bank.

The yuan has strengthened 4% against the dollar in 2025 and is up 0.7% 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.

Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.9570 per dollar, 102 pips weaker than a Reuters’ estimate.

The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.

“Keeping fix and spot close is a way for the PBOC to have more room to influence the spot prices when the environment is more volatile again,” Maybank analysts said in a note.

The offshore yuan traded at 6.946 yuan per dollar, down about 0.08% in Asian trade.

The dollar index, which measures the greenback against a basket of six currencies, was 0.037% higher at 97.72.

 Investors kept a close watch on headlines between the world’s two largest economies ahead of their scheduled talks in April.

China is considering buying more US-farmed soybeans, President Donald Trump said after what he called “very positive” talks with President Xi Jinping on Wednesday, even as Beijing warned Washington about arms sales to Taiwan.