China lifts yuan midpoint to strongest level in near 3 months

The yuan surged in onshore trade on Monday and finished the domestic session at its strongest level in 3-1/2 months, as a strong rally in China's stock market on the back of economic recovery optimism underpinned sentiment. However, traders and analysts said Tuesday's guidance rate came in slightly weaker than their forecasts.

China's central bank lifted its official yuan midpoint to the highest level in nearly three months on Tuesday to reflect strong gains in the spot price a day earlier. The People's Bank of China (PBOC) set the midpoint rate at 7.0310 per dollar prior to the market open, 353 pips, or 0.5%, firmer than the previous fix of 7.0663, and the strongest since April 13.

The move was the biggest one-day strengthening in the guidance rate in percentage terms since April 8. The yuan surged in onshore trade on Monday and finished the domestic session at its strongest level in 3-1/2 months, as a strong rally in China's stock market on the back of economic recovery optimism underpinned sentiment.

However, traders and analysts said Tuesday's guidance rate came in slightly weaker than their forecasts. It was also 39 pips weaker than Reuters' estimate of 7.0271. The deviation quickly dragged down the offshore yuan , after it had risen past the key 7 per dollar level in early trade.

Onshore market starts trading at 0130 GMT.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)