{"id":441508,"date":"2026-11-04T12:40:05","date_gmt":"2026-11-04T05:40:05","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/chinas-yuan-slides-to-two-week-low-as-pboc-moves-to-slow-its-rally-441508\/"},"modified":"2026-11-04T12:40:05","modified_gmt":"2026-11-04T05:40:05","slug":"chinas-yuan-slides-to-two-week-low-as-pboc-moves-to-slow-its-rally","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/chinas-yuan-slides-to-two-week-low-as-pboc-moves-to-slow-its-rally-441508\/","title":{"rendered":"China\u2019s yuan slides to two-week low as PBOC moves to slow its rally"},"content":{"rendered":"<div>\n<p dir=\"ltr\">The PBOC\u2019s moves draw a clear line under how fast it will let the yuan strengthen, which may cap further gains against the dollar and the trade-weighted basket in the near term. A softer yuan could weigh modestly on regional currencies that track it, including the Australian dollar and Korean won, at a time when risk appetite is already fragile because of the US midterms and the Gulf. The step eases pressure on Chinese exporters, which supports the broader effort to stabilise growth and equities alongside this week\u2019s buyback lending measures. The central bank has signalled it has more tools available, so traders may hesitate to bet aggressively on renewed yuan strength.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">\nBeijing has decided the yuan has risen far enough for now, and it used both a rule change and its daily fixing to say so.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>The onshore yuan fell to around 6.68 per dollar, its weakest since 19 October, and the offshore yuan slipped about 0.1%<\/li>\n<li>The <a href=\"https:\/\/investinglive.com\/central-banks\/china-s-pboc-lifts-fx-reserve-ratio-to-6-what-it-means-for-the-yuan-aud\/\" rel=\"follow\">PBOC raised the foreign exchange reserve requirement ratio to 6% from 4% on Tuesday<\/a><\/li>\n<li>The move is seen as one of its strongest attempts to slow a yuan rally of about 5% this year<\/li>\n<li>The PBOC set Wednesday\u2019s midpoint near 6.72, much weaker than the roughly 6.68 expected<\/li>\n<li>The CFETS trade-weighted index eased from a 52-month high but is still up about 5.9% this year<\/li>\n<\/ul>\n<p dir=\"ltr\">\nChina\u2019s yuan fell to its weakest level in more than two weeks against the dollar on Wednesday, Reuters reported. The central bank set a much weaker than expected daily fixing, and investors were digesting its decision to raise banks\u2019 foreign currency reserve requirements.<\/p>\n<p dir=\"ltr\">The onshore yuan weakened to around 6.68 per dollar in morning trade, its softest since 19 October, while the offshore yuan slipped about 0.1% to a similar level.<\/p>\n<p dir=\"ltr\">The move follows the People\u2019s Bank of China\u2019s announcement on Tuesday that it would raise the foreign exchange reserve requirement ratio by 2 percentage points, to 6% from 4%. The ratio sets how much of their foreign currency deposits banks must hold in reserve rather than lend or trade. Raising it reduces the supply of dollars circulating in the onshore market, which tends to support the dollar against the yuan. Traders and analysts described the step as one of the strongest attempts yet to slow the yuan\u2019s rally, which has lifted the currency about 5% against the dollar this year.<\/p>\n<p dir=\"ltr\">A strategist at a European bank told Reuters the central bank was effectively applying the brakes to a surging currency. She said strong Chinese trade was keeping the yuan firm, and that Beijing had plenty of scope to intervene again if the currency\u2019s trade-weighted value kept climbing.<\/p>\n<p dir=\"ltr\">The PBOC reinforced the message on Wednesday with its daily midpoint fixing. It set the midpoint at around 6.72 per dollar, its weakest since 23 October and well below the roughly 6.68 that markets had expected. The spot yuan can trade up to 2% either side of that midpoint each day. Market watchers said the central bank has been guiding the yuan gradually stronger this year, but more slowly than markets anticipated, in an effort to manage the speed of appreciation.<\/p>\n<p dir=\"ltr\">The CFETS index, which tracks the yuan against a basket of trading partners\u2019 currencies, eased to around 103.8 based on Wednesday\u2019s fixing. That was down from a 52-month high on Tuesday, but still up about 5.9% this year, according to Reuters calculations.<\/p>\n<p dir=\"ltr\">The intervention signals that Beijing is wary of a currency strong enough to hurt exporters, at a time when the economy is already contending with weak domestic demand and falling prices.\u00a0\u00a0<\/p>\n<p dir=\"ltr\">\n<p dir=\"ltr\">\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The PBOC\u2019s moves draw a clear line under how fast it will let the yuan strengthen, which may cap further gains against the dollar and the trade-weighted basket in the near term.&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-441508","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=441508"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441508\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=441508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=441508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=441508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}