SHANGHAI: The yuan edged lower against the dollar on Tuesday after the central bank fixed a softer midpoint rate, while the latest data showed that China's capital outflows slowed in February.
Net foreign exchange sales by China's central bank fell to 227.9 billion yuan ($35.1 billion) in February from January's 644.5 billion yuan, signalling fewer central bank interventions to support the yuan as capital outflows eased.
"The yuan's steadiness in the past month helped to ease capital outflows," said a trader at a Chinese commercial bank in Shanghai.
"But depreciation pressure still exists, hinging on the market's expectations of a Fed interest rate hike in March."
Federal Reserve officials are due to meet this week their interest rate strategy.
The People's Bank of China set the midpoint rate at 6.5079 per dollar prior to market open, 0.26 percent weaker than the previous fix 6.4913.
The spot market opened at 6.5055 per dollar and was changing hands at 6.5054 at midday, easing 0.06 percent from the previous close.
Traders reported the onshore yuan was moving in line with a basket of trade-weighted currencies that has become an increasingly important reference for the central bank midpoint.
The offshore yuan was trading 0.09 percent stronger than the onshore spot at 6.4993 per dollar.
The onshore yuan softened 0.1 percent against the euro by midday at 7.2271. It also weakened 0.3 percent against the Japanese yen, hovering at 5.7343 to 100 yen.
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