China's yuan slipped below a key threshold against the US dollar on Tuesday morning, in the wake of a weaker official midpoint and higher corporate demand for the greenback. Prior to Tuesday's market opening, the People's Bank of China set its midpoint for trading at 6.5883 per dollar, 44 pips or 0.07 percent weaker than the previous fix of 6.5839.
The weakness in the official fixing reflected the dollar's gains overnight in global markets. The spot yuan breached the 6.6 per dollar for the first time in a week. The spot market opened at 6.5970 per dollar and was changing hands at 6.6020 at midday, 130 pips weaker than the previous late session close and 0.21 percent softer 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 95.85, weaker than the previous day's 95.96. The global dollar index rose to 93.368 from the previous close of 93.312.
The offshore yuan was trading 0.05 percent stronger than the onshore spot at 6.599 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 6.7525, 2.43 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
Comments
Comments are closed.