Oops! We could not locate your form.Click to close
Adjust Font Size:
SHANGHAI, Sept 9, 2015:
China’s yuan weakened against the US dollar today, shrugging off a marginally stronger midpoint as investors sold the Chinese currency while the central bank was seen to be less heavily intervening in the market via state-owned banks.
“Dollar sales by state banks have become intermittent since this week, in contrast with continuous orders over the previous few weeks, indicating less central bank intervention,” said a dealer at a major European bank in Shanghai.
“As the market still lacks confidence in the yuan’s future value, banks and their clients priced the currency weaker, taking advantage of less intervention.”
The People’s Bank of China (PBOC) set the midpoint rate at 6.3632 per US dollar prior to market open, 0.01% firmer than the previous fix 6.3639.
The spot market opened at 6.3664 per US dollar and was changing hands at 6.3740 at midday, 0.11% weaker than the previous close.
Traders said the PBOC stepped up intervention lately, using state banks to sell dollars to support the yuan after its abrupt devaluation of the Chinese currency roiled global markets.
In a rare revelation, the central Bank said yesterday its intervention in yuan trading was one of the reasons for a record monthly fall in China’s foreign exchange reserves.
Falling short of giving any details, it added that any future fluctuations in reserves would be “normal”.
Traders said the yuan could easily depreciate to 6.4 versus the US dollar if the PBOC stayed on the sidelines.
The 6.4 level is where the market believes the central bank may resume intensified intervention, traders said.
As a sign of weak sentiment towards the Chinese currency, offshore yuan was trading 1.26% weaker than the onshore spot at 6.4555 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 6.625, or 3.95% weaker than today’s midpoint.
13 Jun 2017, 10:06PM
17 Jan 2017, 07:01PM
24 Jan 2016, 11:01AM
23 Oct 2015, 03:10PM
24 Sep 2015, 07:09AM