Chinese banks

The People's Bank of China set its daily USD/CNY central parity rate at a firmer level, a move analysts read as the central bank tightening its management of the yuan and signalling it is uncomfortable with recent currency weakness. Markets watch the daily fix closely for clues on Beijing's stance, and a stronger setting can lift the renminbi, affect regional currencies, and shift sentiment across Asian equities and commodity trades.

China's central bank is expected to set the US dollar/yuan daily reference rate at 6.7085, according to a Reuters estimate. The daily midpoint fixing from the People's Bank of China is closely watched by currency traders as a signal of official policy toward the renminbi, and any deviation from expectations can move Asian currency and equity markets.

UBS argues that the threat posed by Chinese carmakers to Europe's auto industry is larger than European policymakers currently appreciate. The bank's assessment adds to growing concern that Chinese manufacturers, with their cost and technology advantages, could take significant market share from established European brands faster than regulators and industry leaders have planned for.

China's central bank set the yuan's daily reference rate at 6.7399 to the US dollar, a firmer fixing than the previous day's 6.7489. The daily fix from the People's Bank of China guides onshore trading and is closely watched by currency traders for signals on official policy toward the yuan.