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A stronger midpoint lifts China’s yuan ahead of US inflation data.

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SHANGHAI – China’s yuan reaffirmed on Tuesday

after the central bank established a stronger midpoint for the

the daily price band of the currency and how the dollar remained low

after slightly weaker than expected payroll data last week.

With the yuan closely following movements in the dollar index,

Investors await US consumer price data Thursday for more information

clues about the direction of Federal Reserve policy.

“The yuan is likely to remain in range in the short term.

The effect of buying dollars for the payment of dividends may not be as

clear as expected, “said a merchant from a foreign bank, adding that

He was also monitoring developments in US-China relations.

The order of the president of the United States, Joe Biden, last week prohibiting

Investment in certain Chinese companies is larger than a

similar signed by his predecessor Donald Trump and has a

bottom bar, making it easy to add more companies later.

Before the market opening, the People’s Bank of China (PBOC)

set the daily midpoint of the yuan at 6.3909 per dollar,

firmer than previous 6.3963 solution.

The spot yuan opened at 6.3907 per dollar and cut

its advance to change hands at 6.3919 at noon, 45 pips

stronger than the close of the session on Monday.

While the yuan remained on the stronger side of the


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psychologically important 6.4 per dollar level, analysts said

Expectations of a strong appreciation had waned after a series of

official warnings against one-way bets on the coin. The PBOC

It also raised the ratio of mandatory foreign exchange reserves

Deposits for the first time in 14 years last week.

The offshore yuan was slightly weaker, trading at

6.3894 per dollar from a close of 6.3851 on Monday, as the

The global dollar index rose to 90,069 from the previous one.

close of 89,988.

“The actions of the central bank proved to be effective in

remove the one-way RMB appreciation bias, ”said Ken Cheung, Chief

Asian Forex Strategist at Mizuho Bank in Hong Kong.

“The softer figure for China’s exports justified (the) PBOC

concern about the negative impact of the strength of the RMB in China

Exports. The publication of China’s CPI and PPI figures … will show

the effect of RMB appreciation on reducing imports


Growing demand for raw materials fueled growth in China

imports at their fastest rate in 10 years in May, although exports

growth slowed more than expected due to disruption of COVID-19 cases

major ports.

China must publish consumer and producer price index

May figures on Wednesday.

The yuan market at 0401 GMT:


Item Current Previous Change

PBOC midpoint 6.3909 6.3963 0.08%

Yuan spot 6.3919 6.3964 0.07%

0.02% divergence

middle point *

Cash change to date 2.13%

Spot change since 2005 29.48%


Key indices:

Item Current Previous Change


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Thomson 97.8 97.81 0.0

Reuters / HKEX

CNH Index

Dollar index 90,069 89,988 0.1

* Divergence of the dollar / yuan exchange rate. Negative number

indicates that the spot yuan is trading stronger than the midpoint.

The People’s Bank of China (PBOC) allows the exchange rate to

raise or lower 2% of the official midpoint rate established by each



Instrument current difference

from land

Yuan cash offshore 6.3894 0.04%


Offshore 6.5455 -2.36%

not deliverable



* Premium for offshore spot over onshore

** The figure reflects the difference from the official PBOC midpoint,

as undeliverable forwards are settled against the midpoint.


(Report by Andrew Galbraith; Additional report by Xiao

Han in Beijing; Edited by Jacqueline Wong)


In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.


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