China Assets Gain Favor as Investors Seek Volatility Shield, Firmer PBoC Fix, But Misses Estimates

Chinese assets are gaining fresh attention from investors after holding steady through the Iran war and AI boom, with their stable returns making them look like a shield against sharp market swings, Prior to the market opening, the People's Bank of China set the yuan's central parity rate at 6.8054 per US dollar on Tuesday. Comparatively, Tuesday's fixing came 12 pips firmer than Monday's fixing of 6.8066 but 216 pips weaker than the Reuters estimate of 6.7838. At the time of writing, onshore yuan trimmed its earlier losses and inched down 0.01% to 6.7957 against the dollar, and its offshore counterpart declined by 0.08% to 6.79934 in the late Asian session. The spot yuan is allowed to trade at a maximum of 2% on either side of the fixed midpoint each day. The PBoC fixes matter for the US dollar because China manages the yuan against many currencies, but the dollar sits in the middle of most currency pricing. So any change in yuan management can also affect G20/USD pairs globally. The China Foreign Exchange Trade System RMB Index, which measures the yuan against major currencies, inched up 0.06 points to 102.65, as per the latest reading on July 3..