SHANGHAI, Feb 11 (Reuters) - China's yuan slipped
against the dollar on Wednesday, defying the central bank's
firmest daily guidance in three years, as softer-than-expected
consumer inflation and a reaffirmed loose policy stance kept
easing expectations in play.
Consumer prices slowed ?and factory deflation persisted in
January, reinforcing market calls ?for more policy measures to
address the mismatch between supply and demand.
The spot yuan opened at 6.9120 per ?dollar and was
last trading at 6.9154 as of 0157 GMT, 14 pips ?lower than the
previous late session close.
The PBOC said on ?Tuesday that it would ?continue implementing
a "moderately loose" monetary policy, prioritising stable growth
and reasonable price recovery, and keeping the yuan basically
stable ?at reasonable and balanced levels.
Ten-year bond futures ?due in March rose to the
highest level since Nov 6, 2025.
Kiyong Seong, head of Asia Macro Strategy at Societe
Generale, said ?China's 10-year government bond yield could ?drop
toward 1.6% ?from the current 1.79%, but urged investors to watch
for any shift in the PBOC's policy stance.
The dollar index, which measures the greenback
against a ?basket of six currencies, was 0.123% lower at 96.8.
The offshore yuan traded ?at 6.914 yuan per dollar,
down about 0.01% in Asian trade.
Prior to the market opening, the People's Bank of China set
the midpoint rate at 6.9438 per dollar, its strongest
since May 11, 2023, but 329 pips weaker than a Reuters'
estimate. ?The ?spot yuan is allowed to trade 2% either side of
the ?fixed midpoint each day.
The central bank has continued its practice since November
of ?lifting its official guidance, but to a level weaker than
market projections, in what participants interpreted as an
attempt to allow steady and measured appreciation in the yuan.
The yuan had surged to its strongest in nearly three years
against the dollar on Tuesday, underpinned by heavy corporate
demand for the local currency ahead of China's biggest holiday.
Companies, particularly exporters, typically ?need yuan ahead
of the long Lunar New Year holiday to meet various obligations
such as employee wages, supplier payments and bonuses. The
week-long holiday runs from February 15 ?to 23 this year.
LEVELS AT 0157 ?GMT
INSTRUMENT CURRENT UP/DOWN( % CHANGE DAY'S DAY'S
vs USD -) VS. YR-TO-DA HIGH LOW
PREVIOUS TE
CLOSE %
Spot yuan 6.9154 -0.06 1.13 6.912 6.917
Offshore 6.9141 0.01 0.91 6.9105 6.9152
yuan spot
(Reporting by Shanghai Newsroom; ?Editing by Sam Holmes)
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