China's yuan rose to its highest level in more than two weeks against the dollar on Thursday on a much strengthened official fixing, following broad weakness in the greenback as the US steps up plans for punitive trade measures. The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, a White House spokeswoman said on Wednesday, clarifying a tweet last week from President Donald Trump.
The request comes as the Trump administration is said to be preparing tariffs on imports of up to $60 billion worth of Chinese information technology, telecoms and consumer products as part of a US investigation into China's intellectual property practices. Prior to the market opening, the People's Bank of China set the midpoint rate at 6.3141 per dollar, 64 pips or 0.1 percent firmer than the previous fix 6.3205. Thursday's fixing was the strongest since February12.
In the spot market, the onshore yuan opened at 6.3079 per dollar and rose to a high of 6.3054 at one point in morning trade, the strongest level since February27. As of midday, the onshore spot rate was changing hands at 6.3124, 30 pips firmer than the previous late session close and 0.03 percent stronger than the midpoint. However, traders said gains were limited as corporate clients' are growing more keen to buy the greenback as the rate approaches the psychologically important 6.3 per dollar level.
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