Yuan steadies

Shanghai

China´s yuan was steady against the U.S. dollar on Friday, with sentiment improving on firmer signals from the authorities and as investors trimmed bearish bets on the Chinese currency.

The People´s Bank of China set the midpoint rate at 6.8884 per dollar prior to market open, firmer than the previous fix of 6.8957. Friday´s fixing was around 50 pips stronger than some institutions´ models had suggested.

Traders said Thursday´s fixing was also around 80 pips higher compared with their forecasts. The stronger-than-expected guidance rates might have been a result of the midpoint fixing mechanism, traders said, which eliminates some of the highest and lowest quotes from contributors.

Multiple market participants said the authorities have been sending a clear signal about a stabilising yuan to the market by fixing the yuan midpoint slightly stronger.