China Tacitly Guides Yuan Weaker, Though Reopening Hopes Offer Support

(Bloomberg) — China is widening the scope for the yuan to weaken through its daily fixings, a move that hasn’t sparked a sell-off as the currency is buoyed by speculation over a relaxation of its “zero-Covid” policy.

The People’s Bank of China (PBOC) cut its daily reference rate for a sixth session Friday, which would allow the yuan to drop to a 15-year low of 7.4 per dollar within its daily trading band. That didn’t happen even after the top health body reaffirmed a zero-Covid stance following the speculation this week.