Overview
- The People’s Bank of China fixed USD/CNY at 7.0288 on Dec. 31, topping a Reuters estimate of 6.9945.
- Monday’s onshore close was 6.9940 after USD/CNY dipped below 7.0 for the first time since May 2023.
- Traders read a higher USD/CNY midpoint as resistance to faster yuan appreciation and a preference for stability.
- The currency has strengthened recently, with the offshore yuan briefly breaking the 7-per-dollar threshold and trading near 7.009 on Dec. 29.
- China’s managed float allows onshore trading within a +/-2% band around the daily midpoint, with intervention tools available to smooth volatility.