Forex

Yuan eases on weaker midpoint, less central bank intervention

Reuters Shanghai | Updated on January 22, 2018 Published on September 10, 2015

yuan

China’s yuan weakened against the dollar on Thursday in line with a weaker midpoint, while the central bank appeared to be intervening less heavily in the market via state-owned banks.

“State banks sold a small quantity of dollars sporadically on Thursday, changing into mild support compared with aggressive central bank intervention over the previous few weeks,’’ said a trader at a commercial bank in Shanghai.

The People’s Bank of China set the midpoint rate at 6.3772 per dollar prior to market open, 0.22 per cent weaker than the previous fix of 6.3632.

The spot market opened at 6.3825 per dollar and was changing hands at 6.3846 at midday, 0.11 per cent weaker than the previous close.

Traders said the yuan was likely to fluctuate between 50 and 100 points in a day in the near term. The 6.4 level is where the market believes the central bank may resume intensified intervention.

As a sign of weak sentiment towards the Chinese currency, offshore yuan was trading 1.3 per cent weaker than the onshore spot at 6.4687 per dollar. Offshore one-year non-deliverable forwards contracts, considered the best available proxy for forward-looking market expectations of the yuan’s value, traded at 6.657, or 4.2 per cent weaker than Thursday’s midpoint.

Published on September 10, 2015
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