China’s yuan was almost unchanged on Tuesday, as dollar demand weakened after the US dollar index eased away from its 8-month peak on Monday.
“Investors bought dollars gingerly after the dollar index softened,’’ said a trader at a Chinese commercial bank in Shanghai.
“Thus, dollar demand eased a lot and the yuan broadly stayed flat.’’
The dollar index, which tracks the US currency against six major rival currencies, edged down on Tuesday after hitting an 8-month peak of 100.00 on Monday.
The People’s Bank of China set the midpoint rate at 6.3888 per dollar prior to market open, 0.03 per cent weaker than the previous fix 6.3867.
The spot market opened at 6.3915 per dollar and was changing hands at 6.3894 at midday, almost unchanged from the previous close.
Inclusion in SDR basket
Traders also reported that investors expected the central bank to keep the yuan relatively stable for the rest of the month, ahead of the International Monetary Fund’s decision on whether to include it in its synthetic reserve currency basket.
The IMF board staff will decide whether to include the Chinese currency in its Special Drawing Rights (SDR) basket on November 30. The offshore yuan was trading 0.63 percent weaker than the onshore spot at 6.4296 per dollar.