China's yuan steadied versus the dollar on Tuesday, hovering near its record trading high, after the People's Bank of China set the mid-point at a new peak but up only slightly from Monday's fixing, traders said. The PBOC recently fixed a slew of record high mid-points, a signal it may let the Chinese currency's fortunes decouple from political events.
But the record high daily fixings this week have only been marginally higher than each previous session, an indication that the government will continue controlling the pace of yuan rises and preventing its appreciation from inviting speculative "hot money" inflows, traders said.
Spot yuan closed at 6.5827 against the dollar compared with 6.5813 at Monday's close. It has now risen 3.70 percent to the dollar since its mid-June depegging.
It touched an intraday low of 6.5853 and a high of 6.5815, just shy of 6.5808 hit on Monday - its highest intraday trading level since China let the yuan be publicly trade in 1994. Offshore, benchmark one-year dollar/yuan non-deliverable forwards were bid at 6.4550 late on Tuesday, down from 6.4590 at Monday's close. Their implied yuan appreciation in a year's time rose to 2.07 percent from 2.00 percent.
Dollar/yuan offshore forwards have generally staged a lacklustre performance in recent weeks, partly because signs of a US economic recovery pushed hedged funds to reallocate their assets, traders said.
Comments
Comments are closed.