China’s yuan strengthens against dollar

China’s yuan gained ground against the US dollar on Wednesday, as reported by Xinhua. The central parity rate, a key benchmark set by the People’s Bank of China (PBC), rose 11 pips to 7.1048 yuan per dollar.

China operates a managed float system for its currency. The yuan is allowed to fluctuate within a band of two per cent above or below the central parity rate set by the PBC each trading day.

This system allows for some market influence while maintaining a degree of control over exchange rates.