PBOC Yuan Reference Rate Hits 15-Month High as 7.0 Threshold Breaks
The PBOC set the yuan's daily reference rate at 7.0331, its strongest in 15 months. Analyze the impact of the yuan breaking the 7.0 threshold on global markets.
The psychological barrier of 7.0 per dollar has finally cracked. China's central bank just set the yuan's strongest daily reference rate in 15 months, signaling a potential shift in Beijing's currency policy amidst global economic shifts.
The PBOC Yuan Reference Rate Surge
According to reports from Reuters, the People's Bank of China (PBOC) set the yuan's midpoint at 7.0331 to the US dollar this Monday. This is the currency's most robust showing since early October 2024. The move follows a significant rally in offshore trading where the yuan briefly breached the critical 7.0 benchmark, catching many traders by surprise.
Currency Performance Comparison
This sudden strength isn't just about domestic policy; it's a reflection of the weakening US Dollar and rising confidence in China's latest stimulus measures. Breaking through the 7.0 level often acts as a green light for global carry trades, as the yuan becomes an attractive asset for those betting on a sustained recovery in the world's second-largest economy.
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