PBOC Cuts Yuan Central Parity Rate to 7.0948/7.0950, Opens Trade at 7.2251

The People's Bank of China (PBOC) has cut the Chinese Yuan (CNY) Central Parity Rate by either 5 or 2 pips to 7.0948 or 7.0950 per USD, significantly stronger than market expectations. This move comes amidst efforts to maintain stability in the currency market. Reuters reported that the Yuan was set at a much stronger fixing than what markets had anticipated. Additionally, the Yuan opened trade at 7.2251 per dollar, slightly lower than the previous close. Analysts like Brad Setser noted that the fixed CNY rate is limiting spot movement, hinting at a potential reset within the trading band.