China's yuan firmed against the US dollar on Wednesday, setting it up for a third straight day of gains on the back of a stronger fixing and continued corporate dollar selling. Prior to market opening, the People's Bank of China set the yuan midpoint at 6.7075 per dollar, the strongest level since October 10 2016, reflecting strength in the Chinese currency rather than US dollar weakness, traders said.
Wednesday's official guidance was 109 pips or 0.16 percent firmer than the previous fix at 6.7184 per dollar. Market players attributed the firmer fixing to gains in the spot yuan a day earlier. Spot yuan climbed to new 10-month highs on Wednesday. It opened at 6.7070 per dollar and was changing hands at 6.6929 at midday, 151 pips firmer than the previous late session close and 0.22 percent stronger than the midpoint.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.51, firmer than the previous day's 94.24. The offshore yuan was trading 0.15 percent weaker than the onshore spot at 6.7030 per dollar.