SHANGHAI, Oct 29 (Reuters) - China's yuan edged higher
against the dollar on Friday and looked set for the biggest
monthly rise since May, but some investors were wary about any
further upside in the local currency due to buying from
state-owned banks.
Currency traders said the slight gains in the yuan in
morning trade were largely a reflection of broad pressure on the
dollar from rising expectations for earlier European interest
rate hikes.
The euro was propelled on Thursday after comments by
European Central Bank President Christine Lagarde were
interpreted in some quarters as not going far enough in
affirming the central bank's dovish stance.
Markets also remain focused on policy meetings of the
Federal Reserve and Bank of England next week for clues on the
timing of rate tightening at major economies.
The Fed is widely expected to begin tapering its stimulus
from next month, with interest rate lift-off following next
year.
Prior to market opening, the People's Bank of China (PBOC)
set the midpoint rate at 6.3907 per dollar, 50 pips
firmer than the previous fix of 6.3957.
In the spot market, onshore yuan opened at 6.3918
per dollar and was changing hands at 6.3910 at midday, 8 pips
firmer than the previous late session close.
If the onshore yuan finishes the late night session at the
midday level, that would mark a 0.9% rise against the dollar for
the month - the biggest uptick since May. The yuan's value
against its major trading partners has also risen
0.6% to 100.23 on Friday, from 99.64 at end-September, according
to Reuters calculation based on official data.
Heavy corporate dollar selling has underpinned the yuan,
traders said, but sources told Reuters on Thursday that some
state banks were spotted buying dollars in the spot market.
The sources were not certain if the dollar buying by state
banks was on behalf of their corporate clients amid increased
greenback demand from oil firms.
A trader at a foreign bank said the market was wary of state
bank actions, although he is still not ruling out the yuan
testing 6.35 in the near term, its loftiest level this year.
"As Thanksgiving and Christmas seasons are approaching in
the fourth quarter, China's export orders will remain strong,
but they will also be subject to the fragile global supply
chain," China Construction Bank said in a note, and noted that
heavy foreign inflows were among factors supporting the yuan.
Chinese government bonds are set to be included in the FTSE
Russell flagship World Government Bond Index (WGBI) from Friday,
a move that is expected to attract more foreign capital inflows
and support the Chinese currency over the long run.
By midday, the broad dollar index stood at 93.393,
while the offshore yuan was trading at 6.3875 per
dollar.
The yuan market at 0404 GMT:
ONSHORE SPOT:
Item Current Previous Change
PBOC midpoint 6.3907 6.3957 0.08%
Spot yuan 6.391 6.3918 0.01%
Divergence from 0.00%
midpoint*
Spot change YTD 2.15%
Spot change since 2005 29.50%
revaluation
Key indexes:
Item Current Previous Change
Thomson 100.21 100.29 -0.1
Reuters/HKEX
CNH index
Dollar index 93.393 93.362 0.0
*Divergence of the dollar/yuan exchange rate. Negative number
indicates that spot yuan is trading stronger than the midpoint.
The People's Bank of China (PBOC) allows the exchange rate to
rise or fall 2% from official midpoint rate it sets each
morning.
OFFSHORE CNH MARKET
Instrument Current Difference
from onshore
Offshore spot yuan 6.3875 0.05%
*
Offshore 6.5698 -2.73%
non-deliverable
forwards
**
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint,
since non-deliverable forwards are settled against the midpoint.
.
(Reporting by the Shanghai Newsroom
Editing by Shri Navaratnam)
"may" - Google News
October 29, 2021 at 12:24PM
https://ift.tt/3GBnYLI
China's yuan ticks up, set for biggest monthly rise since May - Reuters
"may" - Google News
https://ift.tt/3foH8qu
https://ift.tt/2zNW3tO
Bagikan Berita Ini
0 Response to "China's yuan ticks up, set for biggest monthly rise since May - Reuters"
Post a Comment