China's yuan weakened on Thursday, with traders expecting the Chinese currency to trade sideways, saying views about further yuan depreciation for the near term had lessened. Both Chinese and foreign banks were purchasing dollars in the morning session, taking a "buy low, sell high" strategy to make quick profits, traders said. The People's Bank of China set the midpoint rate at 6.6620 per dollar prior to market open, weaker than the previous fix of 6.6555.
The spot market opened at 6.6663 per dollar and was changing hands at 6.6664 at midday, 54 pips weaker than the previous late session close and 0.07 percent weaker than the midpoint. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.44, firmer than the previous day's 94.43.
The global dollar index fell to 94.871 from the previous close of 94.956. The offshore yuan was trading 0.11 percent weaker than the onshore spot at 6.674 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.827, 2.42 percent weaker than the midpoint.
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