SHANGHAI: The yuan was little changed on Friday after the People's Bank of China set a stronger midpoint to reflect a drop in the US dollar index .
Spot yuan traded at 6.3387 risk," said a forex trader at a foreign against the dollar at midday, 3 pips stronger than Thursday's close.
After hitting the lower bound of its daily trading band for a string of consecutive days earlier this month, depreciation pressure appears to have diminished, traders said.
"Europe has come out with some encouraging measures recently. People are more willing to take on investment bank in Shanghai.
Before trading started on Friday, the People's Bank of China (PBOC) fixed the day's mid-point at 6.3209 on Friday morning, higher than Wednesday's 6.3248 and the strongest since Nov. 17.
The central bank uses the fixing to express the government's intention for the yuan's daily movement.
The yuan traded well above the lower end of its trading band, which would be 6.3525 based on Friday's fix. The PBOC allows the yuan to trade 0.5 percent above or below its daily midpoint each day.
Though most traders expect the yuan to trade in a narrow range for the rest of the year, some traders believe the central bank will guide the yuan higher in the final week of the year in order to meet its unofficial yearly appreciation target.
"Based on previous years, it seems the central bank sets an appreciation target every year," said a trader at a foreign bank in Shanghai.
The yuan has risen 3.96 percent so far this year and 7.69 percent since it was depegged in June 2010.
Comments
Comments are closed.