August 27, 2018 / 1:58 AM / 3 months ago

China sets yuan fix stronger than expected, revives 'X' factor

FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

SHANGHAI (Reuters) - China’s central bank on Monday lifted its official yuan midpoint more than expected to 6.8508 per dollar after it re-introduced a counter-cyclical factor to its daily fixing mechanism to support the currency.

Monday's official yuan midpoint CNY=PBOC was 202 pips, or 0.3 percent, firmer than the previous fix of 6.8710 on Friday.

The guidance rate was also 127 pips higher than Reuters’ estimate of 6.8635 per dollar.

China’s central bank said on Friday that it was adjusting its methodology for fixing the yuan’s daily midpoint in order to keep the currency market stable, amid broad dollar strength and ongoing trade tensions between Washington and Beijing.

Reporting by Winni Zhou and John Ruwitch; Editing by Kim Coghill

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