Updated March 28th, 2024 at 10:05 IST

China's Yuan steady despite dollar strength, supported by PBOC guidance

The PBOC set the midpoint rate at 7.0948 per US dollar, slightly weaker than the previous fix but stronger than Reuters' estimate.

Reported by: Business Desk
Yuan | Image:Pexels Photo
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China's yuan: China's yuan remained steady on Thursday, with strong guidance from the People's Bank of China (PBOC) offsetting pressure from a firmer dollar. 

Market focus shifted to upcoming key US inflation data.

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The PBOC set the midpoint rate at 7.0948 per US dollar, slightly weaker than the previous fix but stronger than Reuters' estimate. 

The move reflects the central bank's efforts to prevent rapid declines in the yuan, which slumped to a four-month low last week.

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In the spot market, the yuan opened at 7.2249 per dollar and held steady at 7.2253 at midday.

The dollar gained ground against major currencies as a Federal Reserve official indicated no rush to cut rates amid persistent inflation concerns. 

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Traders awaited key economic data, including US core inflation figures.

Maybank analysts anticipate two-way trading for the dollar-yuan, with a bias towards the US currency's strength. They expect the PBOC to intervene to prevent further yuan weakness and smooth any sharp fluctuations in the yuan's offshore rate.

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The global dollar index rose slightly, while the offshore yuan traded at 7.2512 per dollar.

(With Reuters Inputs)

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Published March 28th, 2024 at 10:05 IST