PBOC reiterates yuan stance in another subtle message to the US and Trump
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 1.1140 |
ABN AMRO | Bullish | 1.1500 |
Bank of America | Bullish | 1.1500 |
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If you've been following China's messaging on the yuan over the past few months, the latest remarks from the PBOC today should sound rather familiar. The central bank is once again reiterating that Beijing has neither the need nor the intention to weaken its currency in order to
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The desk believes that the improvement in China's reflation momentum, as noted in recent commentary by ING Economics, signals that the People's Bank of China (PBOC) is likely to maintain its current monetary policy stance. With April's economic indicators showing stronger-than-expected growth and inflationary signals, the PBOC is poised to remain on hold rather than engaging in new easing measures. Per the full note, this context positions the Chinese yuan favorably against its peers, particularly as global traders recalibrate their positioning ahead of major economic data releases elsewhere.
PBOC sets USD/ CNY reference rate for today at 6.8467 (vs. estimate at 6.7988)
The desk views the PBOC's recent adjustment of the USD/CNY reference rate as a significant signal of its ongoing monetary policy stance amid a complex geopolitical backdrop. Per the full note [source], the reference rate was set at 6.8467, notably above market expectations of 6.7988, indicating a potential shift in the central bank's approach to managing currency fluctuations. This comes alongside a liquidity injection of 500 million yuan via reverse repos, maintaining the interest rate at 1.4%, which suggests the PBOC is balancing economic support with currency stability. The upcoming state visit by U.S. President Donald Trump may further complicate these dynamics, as trade relations remain a critical factor in currency valuation.
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