China’s yuan rebounds after central bank raises midpoint to highest level in half a year
Yuan Strengthens as China’s Central Bank Raises Reference Rate
On Tuesday, the Chinese yuan recovered against the US dollar, snapping a two-day losing streak. This turnaround followed the central bank’s decision to significantly increase its daily reference rate—the largest adjustment in more than half a year. Investors saw this move as an effort to steady the currency amid market volatility triggered by escalating conflict in the Middle East.
The ongoing hostilities have expanded, with Israel launching strikes against Hezbollah in Lebanon and Iran continuing to target US interests in the Gulf region. Before trading began on Tuesday, the People’s Bank of China set the yuan’s midpoint at 6.9088 per dollar, marking a 0.21% or 148-pip increase from the previous day—its sharpest single-day rise in percentage terms in over six months.
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