The yuan closed slightly weaker against the dollar on Friday as the Chinese central bank fixed a lower reference rate after the dollar rose overnight on risk-aversion buying propelled by weak US June jobs figures. But yuan trading was quiet as dealers said the market was awaiting China's official economic data for June and the second quarter, to be mainly released starting late next week, for hints of the possible changes to the country's foreign exchange policy.
Spot yuan finished at 6.8323 against the dollar, down slightly from Thursday's close of 6.8314 after the central bank fixed the yuan's daily mid-point at 6.8333 versus the dollar, down marginally from Thursday's 6.8309. So far, only one set of data for June has been published, which indicated the country's economy was continuing improvements seen earlier this year. The official purchasing managers' index (PMI) for June rose to 53.2 from 53.1 in May, consolidating for the fourth month in a row above the watershed mark of 50.
Fan Gang, an economist who advises the central bank, said this week that China's economic recovery was sustainable. In particular, exports would grow again, from a low base, by the end of the year, he said. "The market generally expects second-quarter data will show foreign trade has yet to recover, encouraging the central bank to keep the yuan stable for a short period," said a dealer at an Asian bank in Shanghai.
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