China set its strongest yuan fix since January after the U.S. dollar dropped

来源 Cryptopolitan

China’s central bank pushed the yuan’s daily reference rate stronger on Monday than it has since January, reacting fast after Jerome Powell’s Jackson Hole speech sent the dollar sliding.

The People’s Bank of China (PBOC) set the fix at 7.1161 per dollar, down from 7.1321 on Friday, the firmest level since November.

According to Bloomberg, the dollar weakened after Powell left the door open for rate cuts, saying the labor market is showing signs of strain even though inflation still hasn’t cooled completely. The Dollar Spot Index fell 0.8% following his remarks.

The onshore yuan gained slightly, trading at 7.1605 per dollar, after hitting 7.1593, its highest level since late July. But while the reference rate got stronger, the yuan lost ground against a broader set of currencies.

Bloomberg’s gauge tracking China’s currency versus major peers showed a decline early in the session, even with Monday’s firmer fix.

The fixing dropped below 7.12 for the first time since last November, a sign officials may be responding more aggressively to the greenback’s retreat and trying to keep the yuan stable amid renewed global pressure.

Beijing pumps liquidity into market to calm bond stress

The PBOC also moved aggressively to pump cash into the system this month. Beijing added 600 billion yuan ($84 billion) through a mix of one-year Medium-Term Lending Facility loans and three- and six-month outright reverse repos.

Bloomberg’s tally showed this was the largest monthly liquidity injection since January. The injection came as yields surged in the latest 30-year government bond auction, with investors demanding the highest payouts since December.

As the central bank added cash, China’s overnight repo rate fell to 1.35%, dropping seven basis points. Futures tied to 30-year government bonds also jumped as much as 0.7%, their strongest one-day rise since April.

The goal is to maintain easy funding conditions while borrowing demand stays high, and at the same time, avoid a fire sale in bond funds as more retail money flows into equities.

PBOC has leaned hard into its two main tools, the MLF and reverse repos, after earlier policy tweaks this year gave them more flexibility. Officials are trying to balance that fresh money push with the risk of outflows from banks, as individual investors chase hot stocks and abandon savings accounts.

Chip stock ETFs overheat as investors rush in

Over in equities, Chinese tech funds saw massive demand. Premiums on chip-related ETFs soared last week, signaling intense buying activity. The CPIC SSE STAR Chip Design Thematic ETF surged to a 6.2% premium on Friday, well above its historical average of just 0.1%.

Two other major chip funds, the Penghua SSE STAR Chip ETF and the China Universal SSE Science and Tech Innovation Board 50 ETF, also traded at higher-than-usual premiums.

These premiums show that people were buying these ETFs well above their net asset value, often a sign of speculative fever. The surge followed news that DeepSeek’s new AI model had launched, boosting investor confidence in the semiconductor industry. There’s also renewed belief that Beijing’s tech self-reliance push will favor domestic chipmakers.

That optimism fueled a massive run-up in tech indexes. The Star 50 Index, which focuses on hardware stocks, jumped 5.8% on Monday, bringing its total monthly gain to around 20%.

The CSI 300 Index added over 1%, building on last week’s 4.2% climb. But the gap between prices and fundamentals is widening fast, with some market watchers warning about overheating sectors.

Housing stocks rallied too, riding on hopes of more support from Beijing. China Vanke Co. rose to a six-month high, leading a 3% gain in a property sector index, the biggest one-day move in over a month. Shares of Sunac China Holdings Ltd. and Longfor Group Holdings Ltd. also jumped sharply. In Hong Kong trading, Vanke gained as much as 16%, and Sunac soared up to 13%.

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免责声明:仅供参考。 过去的表现并不预示未来的结果。
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