© Reuters.

(Bloomberg) — China signaled the yuan’s recent appreciation, which has taken it to a three-year high against the dollar, is too rapid with a weaker-than-expected reference rate.

The People’s Bank of China set the fixing at 6.3858 per dollar, compared with the average estimate of 6.3837 in a Bloomberg survey of traders and analysts. This follows a statement on Thursday where the central bank had warned against one-way bets and predictions.

With China’s economy rebounding from the pandemic and foreign funds piling into its equity and bond markets, the yuan this week surged past crucial levels that have held for the past three years. It has risen this year against all but six of the 31 major currencies tracked by Bloomberg, and is Asia’s best performer.

“An orderly appreciation in the yuan is acceptable to China’s authorities, but one-way speculation will continue not to be allowed by the PBOC as before,” Gao Qi, a currency strategist at Scotiabank in Singapore, said before the fixing.

©2021 Bloomberg L.P.

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