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MNI: PBOC Restarts Counter-Cyclical Factor In Yuan Fix-Traders

Chinese traders and policy advisors look at the PBOC's latest tactics on FX markets.

The People’s Bank of China appears to have reintroduced the so-called “counter-cyclical factor” in calculations of its daily yuan fixing in response to recent depreciation, forex traders and advisors told MNI, adding that any weakness in the currency is likely to be capped at 7.30 to the dollar for the remainder of the year.

The yuan faces potentially bigger downward pressures in 2025, with U.S. President-elect Donald Trump set to impose heavy tariffs on Chinese goods, they said.

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The People’s Bank of China appears to have reintroduced the so-called “counter-cyclical factor” in calculations of its daily yuan fixing in response to recent depreciation, forex traders and advisors told MNI, adding that any weakness in the currency is likely to be capped at 7.30 to the dollar for the remainder of the year.

The yuan faces potentially bigger downward pressures in 2025, with U.S. President-elect Donald Trump set to impose heavy tariffs on Chinese goods, they said.

Keep reading...Show less