PBoC policy shift ?

Stocks in Asia were mixed on Thursday following the release of Caixin PMI data from China, which was at an 11-month low and as the yuan hit a seven-month high.

The on-shore yuan traded at 6.7894 to the dollar at 12:29 p.m. HK/SIN, at levels not seen since last November. Before markets opened in China, the People’s Bank of China set the yuan mid-point at 6.8090 to the dollar — its strongest level in seven months according to Reuters.

China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the greenback, relative to the official fixing rate.

In the offshore market, where the yuan is more freely traded, the currency fetched 6.7309 to the dollar.

“While there remains some politics in play after the Moody’s downgrade, with numerous projects recently tabled through the ‘One Belt, One Road’ initiative, the stronger yuan could be in China’s best interest to promote yuan internationalization and attract more investment,” OANDA Senior Trader Stephen Innes said in a note

CNBC

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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