China lifts yuan guidance to stronger than 7/dlr level, first time since 2023

China's central bank lifted on Friday its official yuan guidance rate to the stronger side of the psychologically important 7-per-dollar level for the first time since May 2023.

Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.9929 per dollar, the strongest level  since May 17, 2023.

Market participants have been closely watching whether the central bank would allow the official midpoint to be stronger than the key 7 level, which they say would be seen as an official "nod" for further yuan appreciation.

Despite the strong official guidance, the central bank has continued to set the midpoint rate at levels weaker than market expectations, a pattern that has persisted since November.

Friday's official fixing was 448 pips weaker than a Reuters estimate of 6.9481, the largest weak-side deviation since data became available in 2022.

Reuters