China's yuan weakened slightly on Friday, with dollar demand from industrial firms marginally exceeding supply, traders said. But the Chinese currency remained largely stable, as it generally has been since early January amid signs China's economy is improving slightly. The People's Bank of China set the midpoint rate at 6.4898 per dollar prior to market open, 0.15 percent weaker than the previous fix of 6.4803.
Spot yuan opened at 6.4806 per dollar and was changing hands at 6.4823 at midday, 0.04 percent weaker than the previous close. If the yuan's Friday close is the same as the midday level, it would soften less than 0.1 percent for the week. "The market is operating more on its own supply and demand of late, as a stabilising yuan allows the central bank to largely stay on the sidelines," said a trader at a European bank in Shanghai.
"For the day, corporate dollar demand slightly surpassed the overall supply," he said. "However, the consequent slight weakening of the yuan did not represent a firm downtrend." For March, China reported a slew of better-than-expected economic data, particularly a strong foreign trade performance. That soothed global investors jittery about the health of the world's second-largest economy, which had its slowest growth since 2009 in the first quarter. After the yuan's steep depreciation in December, Beijing toughened its policy and has intervened to keep the currency yuan stable since early January.
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