⁍ The offshore yuan CNH=D3 slipped about 0.2% against the dollar to an almost two-week low of 6.7236 per dollar.

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⁍ The Chinese currency has strengthened against the dollar over recent months as foreign capital inflows have sped up.

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⁍ The People’s Bank of China (PBOC) has asked some of the 14 midpoint contributing banks to adjust their models.

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– The People’s Bank of China will no longer rely on a “counter-cyclical factor” to determine the value of the yuan against the US dollar in its daily currency fixing, two sources tell Reuters. The counter-cyclical factor was introduced by China last year in an effort to more accurately reflect currency market movements. But with the yuan appreciating against the dollar in recent months, China’s central bank has decided it’s time to let the currency “become more market-driven,” one of the sources says. The People’s Bank of China has asked some of the banks that make the daily fixing to submit new models that will reflect the currency’s value more closely, the sources say. Analysts say they’re not surprised by the change. “Given that there is no longer any depreciation concerns, it makes sense to do away with the counter-cyclical factor, and reducing the reserve requirement ratio as they have done a couple of weeks back,” Khoon Goh, head of Asia research at ANZ, which is not a fixing contributor, tells Reuters. “This does not necessarily mean that they are seeking to actively weaken the yuan—it is just that those tools are no longer needed.”