HONG KONG: The yuan rose slightly against the dollar but remained near seven-month lows, with the first US presidential debate of 2024 providing little impetus for the market.
Supported by firmer central bank guidance, the yuan was 0.01% higher at 7.2678 to the dollar as of 0312 GMT, after trading in a range of 7.2641 to 7.2685. Analysts said the first debate between Democratic US President Joe Biden and his Republican rival Donald Trump had little impact on China markets as there was less China-bashing and discussion of tariffs on Chinese goods than expected.
Citi analyst Valery Berenshtein said in a note to clients that the dollar might gradually tick higher against offshore yuan on hints from Trump that he could take a harder stance on China. Offshore yuan traded at 7.2994 yuan per dollar, up about 0.07% in Asian trade.
The yuan also found support amid some unwinding of short positions at the end of the month, according to market participants.
That said, the yuan is set to log its sixth straight month decline in June on capital flows into the higher-yielding dollar and amid speculation that China’s central bank is not vehemently against its depreciation. Prior to the market opening, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1268 per dollar, 1,459 pips firmer than a Reuters’ estimate.
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