China’s central bank sets daily yuan rate against US dollar at strongest level in a year
PBOC sets high midpoint rate for yuan, separately reports slowdown in Chinese credit growth, as expectations rise for a US interest rate cut
China’s central bank has set the yuan’s daily reference rate against the US dollar at the strongest level in a year, as expectations grow that the US Federal Reserve will cut rates again this month.
On Thursday, the People’s Bank of China (PBOC) set the yuan’s midpoint rate – also known as the daily fixing rate – at 7.0968 per US dollar, its strongest since October last year.
Stephen Miran, a member of the Fed’s board of governors, said at a forum organised by CNBC on Wednesday that the uncertainty surrounding US-China trade tensions had added risks to the US economic outlook, making the case for rate cuts more urgent.
The market is anticipating two more Fed rate cuts this year, after the US central bank delivered a 0.25-percentage-point cut last month – the first this year.
The offshore yuan edged down to 7.128 per US dollar on Thursday evening, after climbing as high as 7.121 in the morning following the fixing. The currency also strengthened on Wednesday, when the PBOC set the rate at its strongest level since November.