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Bloomberg
China’s central bank raised its yuan fixing for the first time in 13 days as the dollar’s ascent eased, reinforcing speculation that policy makers are prepared to step up measures to slow the currency’s declines.
The People’s Bank of China strengthened its daily reference rate by 0.3 percent to 6.8779 per dollar, ending a 12-day decline that took the rate to the weakest level since June 2008. The monetary authority’s fixings for the past four days were stronger than Mizuho Bank Ltd. and Australia & New Zealand Banking Group Ltd. had estimated. Investors should consider trimming bearish bets on the yuan as authorities are countering depreciation pressures more forcefully, BNP Paribas SA strategists wrote in a note Monday.
“The PBOC is concerned the recent yuan drops would fuel stronger expectations for faster and sharper declines, so it’s taking measures to manage the pace,” said Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd. “The market is still bearish on the yuan in the longer term. China won’t likely prop up the exchange rate but will just control the declines as it will want a weaker currency to aid the economy.”
The onshore currency rose 0.15 percent to 6.8841 per dollar at 5:15 p.m. local time.
The Chinese exchange rate has slumped 1.5 percent since Donald Trump won the U.S. presidential election. A gauge of the greenback’s strength jumped to a January high on Monday amid speculation the Republican’s reflationary economic policies will trigger faster monetary tightening, before reversing its advance to post a 0.4 percent drop.
The onshore yuan suddenly gained before the 4:30 p.m. official close, which is used as a factor to set the next day’s fixing.