China’s yuan edges up on stronger fixing, vulnerable dollar

Some market participants said they were monitoring the outcome of the European Central Bank's meeting on Thursday for possible clues to future shifts in it monetary policy, which was expected to bring some volatility to major currencies.

By: Reuters | Shanghai | Published: January 23, 2018 10:50 am

China's yuan edges up on stronger fixing

The offshore yuan was trading 0.01 percent weaker than the onshore spot at 6.4033 per dollar. (Source: Reuters)

China’s yuan firmed against the US dollar on Tuesday after the central bank set its midpoint fixing at the strongest in more than two years while the greenback remained vulnerable. The dollar pared some losses after US senators struck a deal to lift a three-day government shutdown but it was still close to a three-year low against a basket of currencies.

The People’s Bank of China (PBOC) recalibrated the template for daily yuan fixings recently to nullify a discretionary “counter-cyclical factor” it introduced into the formula last year to contain the currency’s decline. The country’s foreign exchange trading platform, overseen by the central bank, said last week the “counter-cyclical factor” had become neutral with the midpoint fixing mechanism unchanged, but the factor could be revived in the future.