PBOC Raises Yuan Fixing Most in Two Months in Challenge to Bears
- Central bank's move sends a `strong signal,' ANZ's Cheung says
- Onshore-offshore spread reached three-week high on Wednesday
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China’s central bank raised the yuan’s daily reference rate by the most in two months, helping reinforce policy makers’ pledges that the exchange rate won’t be weakened to boost the economy.
The People’s Bank of China strengthened its fixing by 0.16 percent to a four-week high of 6.5419 a dollar. The yuan’s spot rate in Shanghai added 0.11 percent to 6.5695 by 4:41 p.m. in London. The offshore rate traded in Hong Kong rose 0.62 percent, having surged 0.26 percent on Wednesday as weakening prospects for U.S. interest-rate increases led to the dollar’s steepest slide since March 2015. Local financial markets will be closed next week for the Chinese New Year holiday.