China fixes its daily yuan midpoint at 7.0268 — weaker than expected

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    A Chinese bank employee counts 100-yuan notes and US dollar bills at a bank counter in Nantong in China’s eastern Jiangsu province on August 6, 2019.

    STR | AFP | Getty Images

    China’s official midpoint reference for the yuan was set at 7.0268 per the U.S. dollar on Thursday — stronger than Wednesday’s fixing, but it was weaker than what analysts had forecast.

    Analysts were predicting the midpoint to be set at 7.0236 per dollar, according to Reuters estimates.

    It was the sixth consecutive session where the People’s Bank of China (PBOC) fixed the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar mark.

    The onshore yuan last traded at 7.0250. On Thursday morning around 9.24 a.m. HK/SIN, the offshore yuan traded at 7.0518 against the dollar, weakening again after the yuan rebounded overnight on Tuesday — with U.S. President Donald Trump backing off on China tariffs.

    The yuan depreciated past 7 per dollar last week for the first time since the global financial crisis of 2008, which prompted the U.S. Treasury Department to designate China as a currency manipulator.

    Trump has repeatedly complained that a cheaper yuan will give China a trade advantage as it makes Chinese exports more attractive in international markets.

    The PBOC lets the currency’s spot rate trade with a range of 2% above or below the day’s official midpoint fix and this is known as the onshore yuan. The less restrictive exchange rate used outside mainland China is known as the offshore yuan.

    Investors usually look at the difference between the onshore and offshore exchange rates to determine if the Chinese central bank is manipulating the yuan.

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