SHANGHAI- China’s yuan held steady against the dollar on Tuesday as the central bank continued a strengthening bias in its daily official guidance, with the market interpreting it as an attempt to prevent the Chinese currency from sliding.
The yuan has faced renewed depreciation pressure, weighed down by heightened trade tensions with the United States, after US Treasury Secretary Scott Bessent on Friday encouraged Canada to follow Mexico in matching US tariffs on Chinese goods.
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 percent band, at 7.1739 per dollar, 6 pips firmer than the previous fix of 7.1745, albeit against a broadly stronger dollar in global markets.
Tuesday’s official midpoint was 988 pips firmer than a Reuters estimate of 7.2727.
US President Donald Trump said on Monday he told the leaders of Japan and China they cannot continue to reduce the value of their currencies as doing so would be unfair to the United States.
China’s central bank has set its official guidance on the firmer side of market projections since mid-November, which analysts and traders see as a sign of unease over the yuan’s decline.
The onshore yuan was 0.01 percent higher at 7.2870 to the dollar, compared with the previous close of 7.2880.
Its offshore counterpart traded at 7.2927 after briefly weakening past the key 7.3 level.
