Yuan firms to one- year high against US dollar

China’s yuan climbed to its strongest against the US dollar in more than a year on Monday after the central bank raised its official guidance following a slide in the greenback.

The People’s Bank of China raised its official yuan midpoint to 6.6353 per dollar, the strongest since August 19, 2016, reflecting broad weakness in the US currency in global markets.

Monday’s midpoint was 0.34 percent firmer than the previous fix of 6.6579 set on Friday.

Onshore yuan was changing hands at 6.6278 during the afternoon trading, 0.28 percent firmer than the previous late session close. And the offshore yuan was traded around 6.6280.

The strength in the midpoint followed losses in the dollar late on Friday after Federal Reserve chair Janet Yellen made no reference to US monetary policy in her speech at the annual central bank conference in Jackson Hole, Wyoming, disappointing investors.

Meanwhile, the yuan is also supported by a slew of upbeat economic data, which pointed to recent restructuring achievements and provided fresh signs of stabilization for the Chinese economy

With the country’s fundamentals improving, the yuan is likely to advance more against the US dollar, especially when considering that some major currencies like the euro and Australian dollar have moved up 10 percent this year, said Lukman Otunuga, a research analyst at ForexTime, a global trading platform.

Foreign exchange reserves rose for a sixth month in July to hit $ 3.1 trillion, increasing $ 23.9 billion from a month earlier.