China’s support for the under-pressure yuan shows no sign of fading with a now record streak of daily reference rate boosts yet to drag the managed currency away from a near 16-year low.
The People’s Bank of China set the so-called fixing at a stronger-than-expected level for a 54th straight day on Thursday, the longest since Bloomberg started the daily survey in 2018. The streak has now surpassed one seen last year in the midst of China’s Covid Zero policy.
Weighed by China’s increasingly gloomy economic outlook and policy divergence with the US, the onshore yuan has slumped toward its weakest since 2007 even as authorities ramp up support measures via multiple tools. Weakness in the currency brought it perilously close to the weak end of its 2% trading band against the dollar on Wednesday.
“Allowing too much yuan weakness will risk competitive depreciation across Asia, spur capital outflows, and only provide small benefits to the export sector,” said Wei Liang Chang, macro strategist at DBS Bank. “We believe China will continue to lean against yuan depreciation, while allowing some adjustment if the dollar is to strengthen sharply.”
Amid broad strength in the greenback, the yuan has fallen close to 6% this year, though has fared better against other major currencies. A gauge of the Chinese currency versus a basket of its trading peers is down about 2%.Skepticism remains whether China’s measures are game changers in the absence of a less hawkish Federal Reserve or a pickup in the world’s second-largest economy. And some strategists argue China is unlikely to do anything drastic to reverse the yuan’s weakening trend.
“Dollar-yuan holding stubbornly above 7.30 despite the big fix lower tells you the pressure is still higher,” said Jefferies’ Brad Bechtel. “PBOC is definitely going to try not to have some sort of big devaluation event as it ruins the idea of yuan stability, the yuan as a trade currency, potential reserve currency etc.”
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed's Waller: Recent data gives space to decide next rate moveKitco News collects and features the top financial, economic and geopolitical news from around the world. Kitco's aggregated sources include some of the top newswires in the world including the Association Press, Canadian Press, Japanese Economic Newswire, and United Press International.
Read more »
Fed's Waller: Recent data gives space to decide next rate moveBy Michael S. Derby NEW YORK (Reuters) - Federal Reserve Governor Christopher Waller said Tuesday the latest spate of economic data is giving the ...
Read more »
Waller says recent data gives Fed space to decide next rate move, CNBC reportsMarket News
Read more »
G-20 Aims to Triple Renewables and Gives Caveat to Fossil Fuels(Bloomberg) -- Group of 20 nations will aim to triple renewable energy capacity by 2030 though also offered support to technology that can sustain the use of fossil fuels, easing concerns from Russia and Saudi Arabia that had previously stalled a deal.Most Read from BloombergIndia’s Moment Has Arrived, and Modi Wants a New Global OrderChina Slowdown Means It May Never Overtake US Economy, Forecast ShowsHuawei Teardown Shows Chip Breakthrough in Blow to US SanctionsReturn-to-Office Is a $1.3 Tril
Read more »
G-20 Aims to Triple Renewables and Gives Caveat to Fossil FuelsGroup of 20 nations will aim to triple renewable energy capacity by 2030 though also offered support to technology that can sustain the use of fossil fuels, easing concerns from Russia and Saudi Arabia that had previously stalled a deal.
Read more »