China Yuan to Seven Week High on Fixing

China’s yuan advanced to a seven-month high on speculation the central bank wants a stronger currency to spur domestic demand.

The People’s Bank of China raised its reference rate by 0.03 percent to 6.1446 per dollar, the first increase in four days. Economic growth will slow to 7.2 percent this quarter, from 7.3 percent in the previous three months, as local demand weakens, Song Guoqing, an academic member of the PBOC’s monetary policy advisory committee, said Oct. 25 in Beijing.

“It’s all about the firmer fixing,” said Dariusz Kowalczyk, a strategist at Credit Agricole CIB in Hong Kong. “The spot market has adjusted to the perception that the PBOC is signaling preference for further appreciation. Beijing wants a stronger currency because domestic demand was quite weak.”

Bloomberg

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