The Chinese yuan gained on Monday as the People’s Bank of China (PBOC) stepped in to support the currency by re-introducing a counter-cyclical factor to its daily fixing mechanism.
The USD/CNY pair traded at 6.8099 by 1:15AM ET (05:15 GMT), down 0.1% after China’s central bank on Monday lifted its official yuan midpoint more than expected to 6.8508 per dollar.
Monday’s official yuan midpoint was 202 pips, or 0.3%, firmer than the previous fix of 6.8710 on Friday.
The PBOC said on Friday that banks would resume using the “counter-cyclical” factor when calculating the yuan’s daily reference rate to support the currency amid broad dollar strength and ongoing trade tensions between Washington and Beijing.
