China's yuan closed slightly weaker against the dollar after moving in a relatively wide range on Friday, continuing a week-long pattern of active intraday trading but only marginal changes at the close.
The yuan ended at 8.0250 to the dollar, versus Wednesday's close of 8.0240. It hit an intraday high of 8.0190 and a low of 8.0268.
"The market is now directionless and we don't know where the yuan will head, though it is mostly likely to stick to a narrow range," said a Shanghai-based dealer at a foreign bank.
While the yuan has fluctuated by a relatively strong intraday range of around 0.1 percent every day for the past six sessions, it has closed each day inside an extremely narrow band of between 8.0220 and 8.0265.
By Friday's close, the yuan had weakened by 0.35 percent from May 15 when it briefly broke through 8.0000 to hit 7.9972 in intraday trading, its strongest level in a dozen years.
That weakening has capped the yuan appreciation at 1.06 percent since Beijing revalued the currency by 2.1 percent and freed it from a dollar peg in July last year.
Market watchers differed on why the yuan had weakened since May 15, contrary to market expectations. Some suspected central bank influence, a non-market factor which plays a key role in deciding the yuan's exchange rate.
Beijing has cut direct intervention in yuan trade since the July policy change, but has maintained its influence through trading by state banks, including top foreign exchange lender Bank of China, dealers say.
Dealers could not confirm a report by the official Xinhua news agency, which said the yuan's weakening was caused by more oil buying on global markets by major Chinese refiners due to a recent correction in dollar-denominated oil prices. Such firms exchange the yuan for dollars through major Chinese state banks.
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