The yuan ended softer against the dollar in the spot market on Tuesday, retreating from the previous day's four-month high as China's central bank signalled a continued stable yuan policy, but rose in the forwards on expectations of further global weakness in the US currency. Spot yuan closed at 6.8265 against the dollar on Tuesday, down modestly from Monday's close of 6.8234.
The People's Bank of China set its daily yuan mid-point, or reference rate, at 6.8270 versus the dollar on Tuesday, little changed from Monday's 6.8275. But in the offshore non-deliverable forwards, benchmark one-year dollar/yuan NDFs fell to a 13-month low of 6.6645 bid in late trade, implying yuan appreciation of 2.44 percent against the dollar in 12 months from the day's mid-point, up from 2.21 percent appreciation implied at Monday's close.
This year's high for implied 12-month appreciation was 2.5 percent, hit in early June. "Some of our clients expect the dollar will continue to weaken globally in the near term. That is causing the spot yuan rate to move above the mid-point," said a dealer at an Asian bank in Shanghai.
Comments
Comments are closed.