Yuan leaps to 17-month high after week-long holiday

Noble Horvath

SHANGHAI, Oct 9 (Reuters) – China’s onshore yuan leapt to a 17-month high against the dollar on Friday, catching gains in its offshore counterpart on its first trading day after a week-long national holiday and guided higher by the central bank. The onshore spot yuan CNY=CFXS opened at 6.7300 per […]

SHANGHAI, Oct 9 (Reuters)China’s onshore yuan leapt to a 17-month high against the dollar on Friday, catching gains in its offshore counterpart on its first trading day after a week-long national holiday and guided higher by the central bank.

The onshore spot yuan CNY=CFXS opened at 6.7300 per dollar and jumped to a high of 6.7165 at one point, the strongest level since April 24, 2019. It traded at 6.7241 as of 0158 GMT.

Offshore yuan was changing hands at 6.7156 as of 0158 GMT.

Traders said the onshore yuan was playing catch-up with its offshore yuan, which had traded over the week, while developments in the U.S. presidential campaign and a much strengthened midpoint fixing also drove the yuan higher.

“Today’s CNY fixing had a strong bias…I think the main message is that the PBOC is allowing further renminbi appreciation at this level, so markets are positioning for a renminbi rally,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong.

“The U.S. election is another driver…Polls are showing that Biden is taking the lead…it means the risks of resuming a new trade war are getting smaller, so I think this is positive for the renminbi.”

Prior to market opening, the People’s Bank of China (PBOC)set the midpoint rate CNY=PBOC at 6.7796 per dollar, 109 pips firmer than Reuters’ estimate of 6.7905.

(Reporting by Winni Zhou in Shanghai and Tom Westbrook in Singapore; Editing by Sam Holmes)

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