China’s yuan shows strengthening against US dollar on Thursday
(MENAFN) On Thursday, the central parity rate of the Chinese yuan, also known as the renminbi, strengthened by 159 pips, reaching a rate of 7.0989 against the U.S. dollar. This adjustment reflects a notable appreciation of the yuan in the context of the foreign exchange market. The China Foreign Exchange Trade System, which oversees the official exchange rates, reported this increase, indicating a shift in the currency's value relative to the dollar.
In China's spot foreign exchange market, the yuan is permitted to fluctuate within a range of 2 percent above or below the central parity rate each trading day. This system allows for some variability in the currency's exchange rate, providing a buffer for daily market movements and helping to accommodate economic and financial dynamics.
The central parity rate for the yuan against the U.S. dollar is calculated based on a weighted average of prices provided by market makers before the interbank market opens each business day. This method ensures that the central rate reflects a broad range of market inputs and helps establish a benchmark for the day’s trading activities.
Overall, the strength of the yuan against the dollar on Thursday illustrates the currency's relative performance in the foreign exchange market, influenced by both domestic and international economic factors. The daily fluctuations allowed within the 2 percent range further highlight the dynamic nature of currency trading and the factors that can affect exchange rates.
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