China Central Bank Slows Yuan's Rise as it Grows Against Dollar

China's yuan has risen against the dollar, but the central bank is deliberately slowing its ascent as it strengthens year to date. The yuan traded at 6.7837 per dollar on Monday, June 8, and is about 3.1% firmer year-to-date. The PBoC set the daily midpoint fixing at 6.8198 per dollar, 248 pips softer than Reuters' consensus, signaling a policy stance intended to slow gains. Banks have raised dollar-deposit rates to encourage holding dollars, easing pressure on the yuan’s appreciation. Analysts described the yuan's moves as broadly tracking the dollar index but with notably lower volatility, suggesting drivers are shifting beyond the rate gap. China International Capital Corp said the resilience reflects stronger FX settlement flows and improving sentiment toward yuan-denominated assets, while Huatai Futures noted a broader mix of forces at work. Oil rose more than $2 a barrel as Israel renewed strikes on Lebanon, eroding ceasefire hopes and complicating the prospect of reopening the Strait of Hormuz. Reuters notes China will publish trade and inflation data this week, alongside US CPI, making the next 72 hours a crucial data window for currency traders.