AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

HONG KONG: China’s yuan firmed on Monday after touching a four-week low but gains were capped by strong U.S. employment data that reinforced expectations the world’s largest economy can withstand higher rates for longer this year.

The yuan retraced some losses by midday after being weighed down by a rally in the U.S. dollar on stronger-than-expected nonfarm payrolls data, which surged to 517,000 jobs and suggested the Federal Reserve could stay hawkish for longer.

“Strong U.S. data implies that the U.S. economy can still withstand further rate hikes. Prior to the nonfarm data release, the market was initially expecting the first interest rate cut to come in the third quarter,” said Christopher Wong, FX strategist at OCBC Bank. “But now that expectation has been pushed back to December.”

The People’s Bank of China set the midpoint rate at 6.7737 per U.S. dollar prior to market open, the weakest fixing in more than three weeks and softer than the previous fix of 6.7382.

Soon after, onshore yuan slipped further to 6.8077, a four-week low after opening at 6.8055 per dollar. It was changing hands at 6.7810 by midday, 192 pips stronger than the previous late session close.

The spot rate is currently allowed to trade with a range 2% above or below the official fixing on any given day.

The global dollar index rose to 103.072 from the previous close of 102.915.

After the Federal Reserve raised its benchmark rates by 25 basis points to 4.5%-4.75% last week, the market is expecting another quarter percentage point hike in March.

Heightened geopolitical risks could also cap further upside in the yuan.

Over the weekend, U.S. Secretary of State Anthony Blinken postponed his visit to Beijing in a sign of a potential re-escalation of tensions between the United States and China after the U.S. military shot down a suspected surveillance balloon from China. China protested the response as an “obvious overreaction”

“The risk of U.S.-China tensions rising alongside the U.S. dollar rebound momentum on the back of solid economic data could temporarily lend support to USD in the near term,” Wong said.

Offshore yuan was trading 0.15% weaker than the onshore spot at 6.7911 per dollar.

The one-year forward value for the offshore yuan traded at 6.6412 per dollar, indicating a roughly 2.26% appreciation within 12 months.

Comments

Comments are closed.