Yuan bounces off one-month low on firmer guidance, Beijing reveals 2026 targets

SHANGHAI: China’s yuan rebounded from a one-month low on Thursday, after the central bank set its guidance ​at the strongest in nearly three years, a move seen ‌as aimed at stabilising the market amid Middle East tensions and a key domestic meeting.

The annual meeting of China’s parliament opened on Thursday.

Beijing ​set its economic growth target for 2026 at 4.5%-5%, a ​slight downgrade from the 5% pace achieved last year, ⁠which leaves room for greater, albeit not decisive, efforts to ​curb industrial overcapacity and rebalance the economy.

Prior to market opening, the ​People’s Bank of China (PBOC) set its midpoint rate at 6.9007 a dollar, 117 pips or 0.07% stronger than its previous setting.

The central bank has been ​mostly setting a weaker-than-expected guidance rate since late November, Thursday’s ​fixing, however, was 3 pips firmer than a Reuters’ estimate of 6.9010.

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

The strengthened fixing lifted the spot rates. The onshore yuan traded 0.12% higher at 6.8865 per dollar as of ​0205 GMT, with ​its offshore ⁠counterpart at 6.8882.

“It appears policymakers intend to maintain a broadly supportive policy stance consistent with the ​approach taken since 2025,” said Marco Sun, chief ​financial market ⁠analyst at MUFG (China).

In global markets, investors were quick to take comfort in a report that Iran intelligence operatives signaled openness to talks with ⁠the ​CIA to end the war despite ​Tehran’s subsequent denial, underscoring the fraught sentiment towards a conflict that has lashed global ​markets.