Offshore yuan rebounds as PBOC sets stronger midpoint

The offshore yuan rose to around 7.23 per dollar, recovering from a three-month low in the previous session and ending a three-day losing streak.

Offshore yuan rebounds as PBOC sets stronger midpoint

This rebound was primarily supported by stronger-than-expected midpoint guidance from Chinese authorities, indicating concern over the currency’s recent sharp depreciation. The People’s Bank of China set the yuan’s midpoint at 7.1991 per dollar, its weakest level since September 2023, but still 314 pips stronger than anticipated, marking the most significant deviation since August. Meanwhile, Chinese banks issued just CNY 500 billion in new loans for October, a substantial drop from September’s total and below the forecasted CNY 700 billion.

China's inflation falls to a four-month low, producer prices keep deflating

Additionally, weekend data showed that China’s consumer inflation for October fell to a four-month low, missing market expectations, while producer prices continued deflationary for the 25th consecutive month, recording the steepest drop since November 2023.