SHANGHAI: China’s yuan climbed to a fresh 32-month high against the dollar on Thursday, underpinned by a stronger midpoint guidance fix, though it fell short of market expectations. The yuan has been steadily gaining ground in recent months, thanks to a weaker greenback and increased year-end demand for the local currency from exporters to pay employee bonuses. “We see scope for the yuan to strengthen further in the coming month, as we approach a period which has historically been positive for the currency,” said Khoon Goh, head of Asia research at ANZ. Lunar New Year, China’s biggest holiday, falls in mid-February this year. “The People’s Bank of China (PBOC) has been supportive of yuan’s appreciation,” Goh said, noting that authorities appeared comfortable with the yuan strength, though they are guiding it higher at a measured pace through official fixing. Prior to the market’s opening, the PBOC set the midpoint rate at 7.0064 per dollar, the strongest since May 18, 2023, though it was 386 pips weaker than a Reuters estimate of 6.9678. The spot yuan is allowed to trade at a maximum of 2% on either side of the fixed midpoint each day. The central bank has been gradually strengthening its daily official guidance, though it has been at levels weaker than market projections since November, a move that market participants believe is aimed at keeping the currency stable. In the spot market, the onshore yuan at one point strengthened to a high of 6.9678 per dollar, the strongest level since May 2023, before changing hands at 6.9702 as of 0400 GMT. Its offshore counterpart fetched 6.9687 per dollar at 0400 GMT. Upbeat export data released on Wednesday boosted market sentiment and continued to lend support to the yuan, currency traders said, but they said they would quickly switch their attention to credit lending data due later this week for more clues on the health of the Chinese economy. New bank loans in China likely rose in December from a month earlier, a Reuters poll showed, as government stimulus measures slowly began to lift appetites for credit.