China’s central bank may signal cautious yuan appreciation management amid a softer dollar and firmer onshore spot rate.
The People’s Bank of China is expected to set the USD/CNY reference rate at 6.7382, slightly below a neutral estimate of 6.7414. The fix would mark a modest adjustment from the previous midpoint, despite a weaker dollar and stronger onshore yuan closing on Friday.
The PBOC has avoided fully reflecting dollar weakness in its fixings, opting instead for a controlled pace of yuan appreciation. Analysts suggest the central bank may widen the gap between the fix and market expectations to around 500 pips, up from 480, to temper rapid gains.
The midpoint, due at 0115 GMT, will influence trading within a 2% band around the fix. A higher-than-expected rate could lift USD/CNY above Friday’s 42-month low of 6.7878, reinforcing a preference for gradual currency moves.