China's yuan edged up slightly against the US dollar on Monday, following a much stronger midpoint fixing by the central bank. The dollar crawled up from lows on Monday but struggled to pull ahead from six straight weeks of losses, given its evaporating yield advantage and doubts about Washington's commitment to a strong currency. Traders in the yuan market said the dollar would likely continue with its downtrend, which supported the Chinese currency.
The yuan has gained 2.9 percent against the dollar this year, after strengthening about 6.8 percent in 2017. According to Thomson Reuters data, the Chinese unit is on course for its biggest monthly gain since 1994, when market rates were unified. Prior to market opening on Monday, the People's Bank of China (PBOC) lifted its official yuan midpoint to 6.3267 per dollar, the strongest level since November 2, 2015 and the seventh straight firmer fixing. Monday's midpoint was 169 pips, or 0.27 percent, firmer than last Friday's fix of 6.3436.
In the spot market, the onshore yuan opened at 6.3266 per dollar and was changing hands at 6.3250 at midday, 45 pips firmer than the previous late session close and 0.03 percent stronger than the midpoint.