Yuan Hits 2016 High Against USD After PBOC’s Zhou Speaks on FX Strategy

The yuan hit a 2016 high on Monday, after the People’s Bank of China (PBOC) set its official midpoint rate sharply stronger against the dollar and the central bank governor talked up the currency.

The PBOC set the yuan at 6.5118 per dollar prior to the market open on Monday, up from 6.5314 on February 5, the final fix before the week-long Lunar New Year holiday.

The central bank sets a daily midpoint, or reference rate, and allows the yuan to trade 2 percent above or below this point, as the country makes the transition to a market-based currency valuation.

At 0.3 percent higher, Monday’s midpoint fix versus the previous fix was the biggest change since Nov. 2. when the PBOC put the midpoint 0.5 percent higher.

CNBC

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.