China’s yuan halted a three-day drop as the central bank boosted the reference rate amid dollar weakness and on efforts to boost global usage of the currency.
The People’s Bank of China raised the yuan’s daily fixing by 0.05 percent today to 6.1531 per dollar. The Bloomberg Dollar Spot Index dropped by the most in two weeks yesterday as the Federal Reserve signaled it will keep interest rates near zero even after it ends bond purchases. Direct trading of the yuan and the British pound started today in Shanghai, while Canada’s Finance Minister Joe Oliver said his country has held talks with China about establishing a yuan hub in North America.
“The yuan gets some support as the Fed is likely to keep rates low for longer,” said Banny Lam, Hong Kong-based co-head of research at Agricultural Bank of China International Securities Ltd. “China’s determination in promoting yuan usage globally is also a positive. The currency needs to be stable with mild appreciation bias to attract more global interest.”
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