China's yuan closed weaker at 8.1090 per dollar on Monday after moving all the way back down to its original revaluation level of 8.11, knocking confidence that it was set for steady rises. The central bank may have intervened to push the currency lower, dealers said.
"Dealers were confident last week of the yuan going from strength to strength, but after it hit 8.11, we're not so sure anymore," a dealer at a foreign bank said. By its own narrow standards, the currency had moved in a wide range on Monday, opening at 8.1040 per dollar and hitting an intraday low of 8.11. It had closed at 8.1037 per dollar on Friday.
Towards the end of Monday's session, dealers said they had seen several sell orders lined up to test the currency's strength, some of which could have come from the central bank.
"There were lots of sell orders from 8.1080 to 8.11, some of which we suspect could have come from the central bank, but it's hard to say," said a dealer at a major Chinese bank.
Although the yuan is allowed to rise or fall as much as 0.3 percent against the dollar each day under the new regime, it has not risen by more than 0.09 percent in the 12 sessions since it was revalued.
The yuan firmed against the euro to 9.9937 versus Friday's 10.0217, and strengthened to 7.2243 against 100 yen versus 7.2876.
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