Christy Tan, head of Markets Strategy/Research, Asia at National Australia Bank said the yuan's surge over the past few trading sessions did not represent a meaningful departure from the way the PBOC managed its currency. "It is probably premature to call the last 2 days' moves a change in the FX regime," Tan said. It is also unclear whether the yuan's gains against the dollar has stalled for now, with market views for a U.S. rate hike firming due to upbeat U.S. economic data. Stephen Innes, senior trader at OANDA said the aggressive yuan bears will "either go into hibernation or take to the sidelines licking their wounds for the foreseeable future". Separately, the central bank-owned Financial News said on Friday the adjustment to the mechanism the PBOC uses to set the daily yuan midpoint was a pre-emptive move to offset the effects from expectations of a U.S. interest rate increase this month and the stresses of seasonal dollar demand. The China Foreign Exchange Trade System (CFETS) trading platform, overseen by the central bank, said last Friday that a "counter-cyclical factor" would be introduced into the way it calculates the yuan's reference rate each day, allowing it to better reflect supply and demand. Reuters
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