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China’s yuan was almost unchanged against the dollar on Wednesday amid a relatively low trading volume, traders said, as a slightly firmer midpoint offset dollar demand.
“Investors showed little interest in the market with the flattish midpoint signalling stabilisation, investors are expecting the yuan will remain steady in the short-term,’’ said a trader at a foreign bank in Shanghai.
yuan midpoint rate
The People’s Bank of China set the midpoint rate at 6.3877 per dollar prior to market open, only 0.02 per cent firmer than the previous fix 6.3888. The spot market opened at 6.3890 per dollar and was changing hands at 6.3888 at midday, only 0.01 per cent firmer than the previous close.
Still, traders said that the yuan could ease to 6.39 in the remainder of the month, as the offshore yuan was trading over 300 basis points weaker than the onshore yuan, adding to downward pressure on the onshore market.
“The central bank may hope to converge the onshore and offshore yuan within less than 100 basis points,’’ the trader in Shanghai added, “But so far we have no idea about its next move.’’
The offshore yuan was trading around 350 basis points, or 0.54 per cent weaker than the onshore spot at 6.4237 per dollar.
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