The U.S. dollar/yuan pair was trading around 6.597 at 10:10am HK/SIN, compared with 6.6147 at the close of the previous session.
“The driving force behind the dollar sell-off on Tuesday was the climb higher in the yuan,” said Stephen Innes, APAC head of trading at OANDA.
With the 19th party Congress expected on Oct. 18, China’s central bank was likely attempting to provide “overriding stability” in the market and a better platform to encourage foreign investment into China, he added.
China’s central bank governor Zhou Xiaochuan said in an interview with financial magazine Caijing that the country must press on with a “trinity of reforms” that include free trade and investment, letting the market decide yuan’s value and doing away with capital account controls.
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