China’s yuan eases on dollar demand, shrugs off firm midpoint
SHANGHAI, OCT 13: China’s yuan weakened on Tuesday as the central bank’s firmer guidance rate was offset by corporate dollar-buying, which traders said indicated companies are using opportunities created by the yuan’s recent strengthening to get hold of more dollars.
“There were large amounts of dollar purchases from corporates as the yuan rose of late and the dollar softened in the past few days,’’ a trader at a Chinese commercial bank in Shanghai said.
The People’s Bank of China set the midpoint rate at 6.3231 per dollar prior to market open, 0.28 per cent firmer than the previous fix of 6.3406.
The spot market opened at 6.3242 per dollar and was changing hands at 6.3366 at midday, weakening 0.21 percent from the previous close.
The yuan had kept rebounding since September 24 and hit its highest since the surprise devaluation on August 11 on Monday.
China’s trade data
Traders also said that the weak trade data released on Tuesday might increase some concerns on the country’s economy and its currency.
China’s exports fell 3.7 per cent from a year earlier in September in dollar-denominated terms, while imports tumbled 20.4 per cent. That left a trade surplus of $60.34 billion for the month.
The General Administration of Customs, however, said that China’s exports are expected to improve in the fourth quarter, while a decline in imports will moderate.
The offshore yuan was trading in line with the onshore spot at 6.336 per dollar.
Source : thehindubusinessline.com