China strengthened its defense of its currency on Wednesday by increasing its daily references exchange rate amid increasing trade tensions with the United States. The People’s Bank of China set the so-called “yuan fixation rate” at 7.0995 against the dollar, a stronger level than the careful 7.1 for the dollar. The foreign Yuan continued its profits after this move. Also read: The yuan is at its highest level since November, amid the weakness of the dollar and the strength of shares, which supports the yuan. This is the first time since November that the central bank has determined a stronger fixation rate than 7.1 for the dollar, after maintaining the level since the end of August. This stronger stabilization is likely to provide more support to the Chinese currency, after it has risen more than 2% against the dollar since the beginning of the year. “A consolidation under 7.1 sends a strong message of solidity,” says Fiona Lim, senior FX strategist at Malayan Banking BHD in Singapore. She added, “The strong yuan is a symbol of China’s position as a mighty party in any negotiations or mutual escalation.”
China defends the yuan amid trading tension with America
