China lifts yuan fix to 3-week high, stronger than forecast

Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.0994 per dollar, 69 pips firmer than the previous fixing of 7.1063 on April 30. Monday's guidance fix was the strongest since April 15.

China lifted its official yuan midpoint to the highest in three weeks on Monday, the first trading day after the long Labor Day holiday, to catch up with offshore movements. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.0994 per dollar, 69 pips firmer than the previous fixing of 7.1063 on April 30.

Monday's guidance fix was the strongest since April 15. However, the central bank continued its months-long practice of setting the rate at levels firmer than market projections, widely viewed by traders as an attempt to keep the currency stable. It was 1,133 pips stronger than a Reuters estimate of 7.2127.