China Yuan Up Late on PBOC Guidance

China’s yuan rose against the U.S. dollar late Thursday after the central bank guided the yuan stronger via a daily fixing, ending three days of guiding the currency lower, though traders said they continue to expect the yuan to depreciate for the rest of this year.

On the over-the-counter market, the dollar was at CNY6.3841 around 0830 GMT, lower than Wednesday’s close of CNY6.3885. It traded in a range of CNY6.3816 to CNY6.3866.

The People’s Bank of China set the dollar/yuan central parity rate at 6.3381 before trading started Thursday, down from 6.3429 Wednesday but above the 6.3330 level expected by some traders.

The lower dollar/yuan parity was in line with the euro’s overnight rebound and ended the central bank’s three-day campaign to push the currency weaker amid a gloomy economic outlook.

However, the yuan’s fixing fell short of market expectations and lagged the euro’s gains, a signal that the authorities may be unwilling to create the impression that they would allow the currency to undergo another bout of sharp appreciation at a time of slowing economic growth.

via WSJ

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza