On August 25, the People’s Bank of China set its daily yuan midpoint at 6.7852 per dollar, landing 633 pips below the Reuters consensus estimate. This represents the widest weak-side deviation since February 27, when the PBOC went even further with an 800-pip surprise. The yuan has posted year-to-date gains of roughly 4% and recently touched 3.5-year highs against the dollar. Since late July, the PBOC has established a pattern of fixing the midpoint well below market expectations, with prior deviations of 581 and 593 pips recorded in recent weeks. Beijing wants to slow the yuan’s rise without triggering accusations of currency manipulation or destabilizing capital flows.
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