China's yuan hovers near 4-year high ahead of Fed decision

By Summer Zhen

HONG KONG, Oct 28 (Reuters) - China's yuan was little changed against the US dollar on Wednesday as traders awaited the Federal Reserve's policy decision for clues on the near-term interest rate outlook.

Markets broadly expect no change in US central ​bank policy this week, but believe a rate-hike pause ​will not last for long given inflation remains stubbornly high.

The yuan was 0.01% lower at 6.6675 to the dollar as of 0322 GMT, after trading in a range of 6.6667 to 6.6701.

It hovered just below the four-year high of 6.6660 hit in the previous session.

"With little (Fed) policy surprise anticipated, markets will turn to the guidance, if any, particularly whether elevated energy prices and inflation risks leave policymakers open to further tightening," MUFG analysts said in a research note.

A hawkish tone could weigh broadly on Asian currencies, they said.

Prior to the market opening, the People's Bank of China set its yuan midpoint rate at 6.7165 a dollar, 431 pips weaker than a Reuters' estimate. The central bank allows spot yuan to trade 2% either side of the midpoint each day.

Robust manufacturing data has provided yuan support.

Industrial profit grew at a faster pace in September than market watchers estimated, mainly due to the computer, communication and other electronic equipment manufacturing category.

The yuan is up 0.6% against the dollar this month and 4.9% this year.

The offshore yuan traded at 6.666 yuan per dollar , down about 0.02% in Asian trade.

The dollar's six-currency index was 0.029% higher at 102.39.

LEVELS AT 0321 GMT