Yuan Fixing Near Post-Devaluation Low Is Bearish Sign to SocGen
- PBOC has cut reference rate by 0.8% in past three weeks
- Fresh low would be an `important' signal, analyst says
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China’s reference rate for the yuan is approaching the weakest level since an August devaluation and a breach of the low would likely fuel speculation that policy makers are prepared to let the currency depreciate, according to Societe Generale SA.
The People’s Bank of China on Aug. 11 surprised global investors by switching to a more market-driven fixing regime that sparked the yuan’s steepest plunge in two decades. It set the currency’s reference rate at 6.3896 per dollar on Thursday, about 0.3 percent stronger than an Aug. 27 level that was the weakest in four years. The spot rate in Shanghai is allowed to trade a maximum 2 percent on either side of the fixing.