USD/CNY: Yuan back in the red on broad USD strength

The Chinese currency stalled its recovery mode and dived deep in the red, after yesterday’s solid USD advance triggered by ECB’s dovish taper decision, which sent EUR/USD almost 250 pips lower.

The Yuan fell back in the red per dollar after the Chinese central bank, PBOC, lowered the Yuan fix by the most in seven weeks to reflect a stronger US dollar. The PBOC set the yuan reference point against the US dollar at 6.8972, 241 basis points higher or 0.35% weaker than Thursday’s fix of 6.8731.

However, the losses in the Chinese currency appear capped as the Chinese state banks are said to have intervened in order to stem yuan weakness.

Meanwhile, the USD/CNY pair traded +0.30% higher at 6.8998 at mid-day, flirting with daily highs of 6.9003.