China sets yuan mid-point much stronger than forecasts for 2nd straight day

China's central bank lowered its official yuan midpoint to a new 11-1/2-year low on Wednesday, but at a firmer level than traders had expected. The People's Bank of China (PBOC) set the midpoint rate at 7.0835 per dollar prior to market open, 25 pips weaker than the previous fix of 7.0810 and the weakest since March 18, 2008.

Traders said Wednesday's official guidance rate again came in much stronger than their forecasts, and markets took it as an official attempt to slow the pace of yuan depreciation. Wednesday's official guidance rate was 192 pips or 0.27% stronger than Reuters' estimate of 7.1027 per dollar.

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