Yuan Edges Higher Despite PBOC Weaker Fixing as Dollar Sags

China's yuan strengthened against the US dollar on Monday despite the People's Bank of China setting a weaker-than-expected fixing rate. The spot yuan opened at 6.7520 per dollar and was last trading at 6.75, 25 pips firmer than the previous close.

The PBOC set the midpoint rate at 6.7898 per dollar on Monday, which is 534 pips weaker than a Reuters estimate. The spot yuan can trade up to 2% either side of the fixed midpoint each day.

Analysts said the yen's strength has generated modest positive spillovers, particularly across low-yielding North Asian currencies, with the offshore yuan, Singapore dollar and Taiwan dollar standing to benefit most if the rally extends.