China Sets Stronger-Than-Expected Yuan Fix Amid Currency Drop

(Bloomberg) — China set its reference rate for the yuan at a stronger-than-expected level as the nation’s widening monetary policy gap with the U.S. drove the currency to the lowest in two years.

The People’s Bank of China set the fixing at 6.8536 per dollar, 120 pips stronger than the average estimate in a Bloomberg survey of analysts and traders, and the strongest bias since February 2020. The move came after the onshore yuan touched a fresh two year low Wednesday.