The offshore yuan traded around 6.76 per dollar on Tuesday, reaching its strongest level in a month, supported by firmer official guidance from the People’s Bank of China. The central bank set the daily midpoint rate at 6.7917 per dollar, 31 pips stronger than the previous fixing of 6.7948. The latest move signaled continued support for the currency, even as geopolitical tensions in the Middle East boosted demand for the US dollar as a safe-haven asset. Providing additional support, the State Council emphasized accelerating policy implementation and improving the efficiency of fiscal spending, underscoring its commitment to bolstering growth after Q2 GDP slowed to 4.3%, the weakest pace in more than three years and well below Beijing’s annual target range of 4.5% to 5%. Investor focus is now turning to the Communist Party of China’s upcoming Politburo meeting later this month for signals on the economic policy agenda for the second half of the year.
