Yuan off 27-month high on talk Beijing getting uneasy over recent surge

Yuan off 27-month high on talk Beijing getting uneasy over recent surge

22 Oct 2020 11:15 AM
 

The Chinese yuan retreated from a 27-month high on Thursday as a weaker-than-expected official fixing and the approval of fresh outbound investment quotas suggested authorities have become increasingly wary over the recent rapid gains in the currency.

The onshore yuan has rallied more than 6% on the dollar since late May, stoking market speculation that Beijing would roll out policy measures soon to tamp down the surge as a too-strong currency could hurt Chinese exporters.

Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.6556 per dollar, 225 pips, or 0.34%, firmer than the previous fix of 6.6781, and marked the strongest guidance rate since July 11, 2018.

In the spot market, the onshore yuan opened at 6.6503 per dollar and was changing hands at 6.6669 at midday, 167 pips weaker than the previous late session close.