China's yuan holds ground ahead of Fed outcome

SHANGHAI: China's yuan steadied against the dollar on Wednesday despite a much-strengthened official guidance rate set by the central bank, as investors stayed on the sidelines ahead of the Federal Reserve's policy outcome due later in the day.

The dollar clung to recent gains and traded near multi-week highs against a handful of major peers ahead of the Fed decision, with traders expecting the first of what could be several U.S. interest rate hikes.

Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.7628 per dollar, its strongest since February 3, 2023, and 480 pips weaker than a Reuters estimate of 6.7148.

The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.