China's Yuan Rally and Currency Intervention

China's major state-owned banks have been actively swapping and selling dollars for yuan, leading to a significant rise in the yuan's value. The yuan has reached its highest levels in nearly 4 months, causing the onshore spot yuan to briefly touch its highest level since 4 months. The PBOC's lowering of the dollar-yuan daily fixing rate indicates preparatory work for a policy rate cut, while the recovery in the Chinese economy remains uneven and bumpy. Analysts suggest further monetary easing could add downside pressure on the Chinese currency due to the wide differential between interest rates in China and other economies, particularly the United States.