China lifts yuan midpoint to strongest level in near three months

The yuan surged in onshore trade yesterday and finished the domestic session at its strongest level in 3-1/2 months. — Reuters pic
The yuan surged in onshore trade yesterday and finished the domestic session at its strongest level in 3-1/2 months. — Reuters pic

SHANGHAI, July 7 ― China's central bank lifted its official yuan midpoint to the highest level in nearly three months today to reflect strong gains in the spot price a day earlier.

The People's Bank of China (PBOC) set the midpoint rate at 7.0310 per dollar prior to the market open, 353 pips, or 0.5 per cent, firmer than the previous fix of 7.0663, and the strongest since April 13.

The move was the biggest one-day strengthening in the guidance rate in percentage terms since April 8.

The yuan surged in onshore trade yesterday and finished the domestic session at its strongest level in 3-1/2 months, as a strong rally in China's stock market on the back of economic recovery optimism underpinned sentiment.

However, traders and analysts said today's guidance rate came in slightly weaker than their forecasts. It was also 39 pips weaker than Reuters' estimate of 7.0271.

The deviation quickly dragged down the offshore yuan, after it had risen past the key 7 per dollar level in early trade.

Onshore market starts trading at 0130 GMT. ― AFP

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