MNI BRIEF: PBOC Sets High USDCNY Fixing Amid Trade War

The People’s Bank of China set its U.S. dollar, yuan fixing at its highest level in 19 months as the currency suffered downward pressure amid an escalating trade war. 

The dollar-yuan central parity rate printed at 7.2038, the first time breaching 7.20 level since September 2023. The 7.20 level has been widely watched by traders since last year as the central bank continued to support the yuan by setting a lower fixing than estimates. 

Policy advisors told MNI the PBOC would limit any sharp depreciation of the yuan to avoid the significant fall seen during Donald Trump's first presidency, but the biggest short-term threat to the currency comes from potential increases in U.S. tariffs. (See MNI: PBOC To Ensure Yuan Stability In Trump's Second Term)