RMB strengthens to seven-month highs

The Chinese yuan extended its gaining streak against the US dollar Thursday, as China’s central bank continued guiding the currency higher in the market. Earlier Thursday, the onshore yuan hit a new seven-month high of 6.7830 against the dollar, after the People’s Bank of China raised the daily reference rate that guides trading in the spot market by the most since Jan. 6, according to the China Foreign Exchange Trade System (CFETS). The onshore yuan closed at 6.8061 per dollar Thursday. The offshore yuan, on the other hand, continued its ascent and hit 6.7229 against the greenback earlier Thursday. The offshore yuan has surged sharply in recent days amid a liquidity crunch of the yuan outside of China, according to bankers in Hong Kong, one of the yuan’s offshore trading centers. According to Caixin, some traders said the PBOC’s move could be in reaction to Moody’s China credit rating cut last Friday.