China's yuan edged up as investors returned from a long holiday weekend to play catch-up with broad dollar weakness in global markets.
The dollar sank to an almost two-week low against its major trading partners, moving in tandem with retreating Treasury yields from recent peaks despite signs of a robust U.S. economic recovery.
The weaker dollar prompted the Chinese central bank to lift its official yuan guidance higher and prop up the spot rates. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at a one-week high of 6.5527 per dollar, 122 pips or 0.19% firmer than the previous fix of 6.5649.
In the spot market, the onshore yuan trading unchanged from the open at 6.5550 per dollar, 125 pips firmer than the previous late session close on Friday.
Its offshore counterpart also firmed, trading at 6.561 per dollar by midday.
Along with recent economic indicators including manufacturing data, China continued to recover from coronavirus disruption, analysts said, but some argued that the pace was surpassed by that in the United States due to rapid vaccine rollout and fiscal stimulus in the world's largest economy.
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