(Bloomberg) -- China's yuan weakened minutes before Wednesday's official close, reversing an earlier gain that had pushed the currency to its strongest level in more than two years.
The onshore yuan fell as much as 0.26% to 6.5490 per dollar, touching its session low just after 4:30 p.m. The rapid move came after the offshore yuan had earlier strengthened past 6.5 per dollar for the first time since 2018, expanding the gap between the two rates to one of the widest seen this year.
Four traders, who declined to be identified because they weren't authorized to talk to the media, said a few large Chinese banks were seen buying dollars in large volume around 4 p.m.
The move puts the spotlight on the central bank's daily yuan fix on Thursday. A weak fixing could increase speculation that the People's Bank of China helped encourage Wednesday's slide. That's because the daily reference rate is calculated with a formula that includes the prior day's official close at 4:30 p.m. in Shanghai. A similar move occurred in October.
“It's hard to say for sure whether this is unofficial intervention,” said Jian Hui Tan, a foreign-exchange strategist at Informa Globalmarkets (S) Pte Ltd. He added that the offshore yuan's earlier rise past the 6.5 handle “could have potentially been a trigger.”
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