China’s central bank set the official midpoint reference rate for the yuan at 7.0326 per dollar on Tuesday, stronger than what analysts were expecting, but weaker than the previous session.
It was the fourth consecutive session where the People’s Bank of China fixed the midpoint at a level weaker than the psychologically important 7-yuan-per-dollar mark.
Analysts were predicting the midpoint to be set at 7.0421 per dollar after the yuan last traded at 7.0578 in Monday’s session, according to Reuters estimates.
The yuan has become a focal point among investors because of the ongoing trade war between the United States and China, which escalated earlier this month when President Donald Trump said the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.
The PBOC lets the spot rate trade with a range of 2% above or below the day’s official midpoint fix and this is known as the onshore yuan. The less restrictive exchange rate used outside mainland China is known as the offshore yuan. Investors usually look at the difference between the onshore and offshore exchange rates to determine if the Chinese central bank is willfully manipulating the yuan.