China's Currency Moves: Yuan Midpoint Hits New High

China recently adjusted the official yuan midpoint to its strongest level in over two months, although it was slightly weaker than market predictions. The People's Bank of China set the midpoint rate at 7.1803 per dollar, aiming for stability amid a globally weakening dollar.

In a significant monetary adjustment, China elevated the official yuan midpoint to its strongest level in over two months on Thursday. However, the adjustment fell short of market expectations.

Before markets opened, the People's Bank of China (PBOC) established the midpoint rate at 7.1803 per dollar, marking its robustest rate since April 2. Daily, the spot yuan can fluctuate 2% on either side of this fixed midpoint.

Despite this proactive move, the official guidance came in 100 pips weaker than a Reuters estimate of 7.1703, a strategic maneuver interpreted by traders as China's attempt to ensure yuan stability against the backdrop of a broadly weakening dollar in global markets.

(With inputs from agencies.)