China's yuan hits highest since devaluation, boosted by firmer midpoint fix

China's yuan rose against the dollar on Monday to its highest level since its surprise devaluation on Aug. 11, after the central bank set a stronger midpoint.

The People's Bank of China set the midpoint rate at 6.3406 per dollar prior to the market open, 0.14 per cent firmer than the previous fix of 6.3493 and the strongest official guidance rate since Aug. 12.

In the spot market, yuan opened at 6.3387 per dollar and was changing hands at 6.3302 at midday, 0.24 per cent firmer than the previous close. It firmed to as much as 6.3293 at one point, its highest since Aug. 11.

A deluge of data from China in coming weeks is likely to point to further weakness in the country's economy, with expectations that Beijing will roll out more stimulus measures to ward off a sharper slowdown, a Reuters poll showed.

But traders said the currency market shrugged off those expectations as the markets had grown used to relatively weak data from the world's second-largest economy, as long as there were no signs of a precipitous slowdown.

"Both the onshore and offshore markets are no longer sensitive to the economic indicators for now," said an offshore yuan trader at a foreign bank in Hong Kong.

The offshore yuan was trading almost in line with the onshore spot at 6.3305 per dollar.

Traders said that little intervention by the central bank was seen in both onshore and offshore markets.

China abruptly devalued the yuan on Aug. 11, roiling global markets for some weeks, and had to scramble to contain fears that it was set to let the currency depreciate further.

The central bank said on Saturday that China will step up its crackdown on illegal cross-border money transfers conducted by underground money dealers and offshore companies.

China also made a fresh push for its currency to be included in the International Monetary Fund's benchmark currency basket on Friday and argued that recent reforms put it closer to qualifying.

Still, another Reuters poll showed that emerging Asian currencies are expected to fall further over the coming year due mainly to a regional economic slowdown, led by China.