Yuan hovers just below four-year high of 6.6660 ahead of Fed decision
The yuan was little changed against the US dollar on Wednesday, trading at 6.6675 as of 0322 GMT after moving in a range of 6.6667 to 6.6701. It hovered just below the four-year high of 6.6660 hit in the previous session. The offshore yuan traded at 6.666 yuan per dollar, down about 0.02% in Asian trade.
Markets broadly expect no change in US central bank policy this week, but believe a rate-hike pause will not last for long given inflation remains stubbornly high. MUFG analysts said in a research note that with little policy surprise anticipated, markets will turn to the guidance, particularly whether elevated energy prices and inflation risks leave policymakers open to further tightening. A hawkish tone could weigh broadly on Asian currencies, they said.
Prior to the market opening, the People's Bank of China set its yuan midpoint rate at 6.7165 a dollar, 431 pips weaker than a market estimate. The central bank allows spot yuan to trade 2% either side of the midpoint each day.
Robust manufacturing data has provided yuan support. Industrial profit grew at a faster pace in September than market watchers estimated, mainly due to the computer, communication and other electronic equipment manufacturing category. The yuan is up 0.6% against the dollar this month and 4.9% this year. The dollar's six-currency index was 0.029% higher at 102.39.
