NewChina’s yuan strengthens in early trade as PBOC midpoint hits new 15 month high

China’s currency strengthened against the US dollar in early Monday trading after the central bank set the daily midprice at a new 15 month peak.

The onshore yuan-US dollar cross rate hit 6.2031 at 11:30am Monday after closing at 6.2061 last week.

The People’s Bank of China set the benchmark midpoint price at 6.1079 against the US dollar on Monday morning, extending a recent run of record highs.

Analysts remain divided on whether the yuan should be allowed to weaken to help support China’s struggling export sector. Some have said that China’s strategy is to keep the currency strong and so reduce the threat of sudden capital outflows.

The offshore yuan-US dollar cross rate was 6.2028 at 11:30am Monday, a slight strengthening for the yuan over Friday’s 6.2050 close.

The US dollar traded at a three month low against the euro on Monday. The greenback’s weakness means it continues to trade around 7.75 to the Hong Kong dollar, up against the top edge of the currency peg.