PBOC Seen Overriding Yuan Market Moves to Limit Depreciation
- Currency rises most in two weeks on bets China defending 6.7
- Central bank strengthens fixing even as dollar gauge advances
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The yuan advanced the most in two weeks, with the central bank’s daily fixing adding to signs that China’s authorities are prepared to overrule the market to control the currency’s moves.
The People’s Bank of China strengthened its reference rate, which restricts onshore yuan moves to 2 percent on either side, even as the dollar advanced the most since July 5. This spurred speculation that the central bank isn’t sticking to its stated policy of following the direction of the market, which would have resulted in a weaker fixing.