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China's central bank set the Renminbi midpoint at 6.7307 per dollar on Thursday, the strongest level since October 18th, 2016, reflecting the dollar's broad weakness in global markets.
Thursday's official guidance was 222 pips or 0.33 percent firmer than the previous fix at 6.7529 per dollar.
The move in the guidance was the biggest one-day strengthening in percentage terms since June 28th.
The US dollar fell overnight, touching its lowest level in more than a year against a basket of currencies after the release of the Federal Reserve's policy statement following its July meeting.
Supported by the much stronger official guidance rate after the greenback was hit by diminished expectations of a further US rate hike by year-end, the Chinese currency firmed against the dollar on Thursday and is on course for its best day in nearly two months.
In the spot market, the Renminbi opened at 6.7370 per dollar and rose to a high of 6.7235 before changing hands at 6.7272 at midday, 283 pips firmer than the previous late session close and 0.05 percent stronger than the midpoint.
That translated into a 0.42 percent rise against the greenback for the day and would be the biggest gain since May 31st if the current strength was maintained by close.
"The Renminbi was basically following the dollar's movements in morning trade," said a trader at a Chinese bank in Shanghai, adding orders from companies on dollar purchases and sales were balanced.
Market participants say most traders have shifted from holding an entrenched bearish view on the Renminbi following concerted efforts by Beijing to stabilize the currency since the second quarter.
The dollar is now seen under pressure given the Fed's more cautious stance on further rate increases.
(CGTN)
