SHANGHAI: China’s yuan eased to a more than one-week low against the dollar on Monday, as investors await a summit between the top leaders from the world’s two largest economies later this week for more clues on the Sino-US relations.
US President Joe Biden will meet Chinese President Xi Jinping in person for the first time in a year on Wednesday during the Asia-Pacific Economic Cooperation summit in San Francisco. It will be only the second in-person meeting between the two leaders since Biden took office in January 2021.
Sino-US bilateral relations have been one of the key factors influencing the yuan’s movements over the past few years, and any signs of positive developments could lift the Chinese currency.
Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1769 per dollar, 2 pips firmer than the previous fix of 7.1771.
The official midpoint fixing continued to come in stronger than market projections, traders and analysts said, interpreting it as an official attempt to rein in excess yuan weakness.
Monday’s guidance rate was 1,120 pips stronger than Reuters estimate of 7.2889.
In the spot market, the onshore yuan opened at 7.2929 per dollar and weakened to a low of 7.2965, the softest level since Nov. 3. By midday, it was changing hands at 7.2962, 112 pips weaker than the previous late session close.
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