China's yuan weakened on Monday even though the central bank set a stronger midpoint as the dollar index slid in overnight trade after better-than-expected US jobs data increased investor risk appetite. The People's Bank of China (PBOC) set the midpoint at 6.3353 in the morning. Spot prices opened at 6.3680 per dollar, slightly stronger than Friday's close, continuing a trend of trading closer to the midpoint that began in late July.
However, volatility was minimal and spot yuan closed at 6.3742 per dollar. A trader at a joint-stock bank in Shanghai said transaction volumes were light. The one-year non-deliverable yuan forward contract traded at 6.4200 at the market close in Shanghai. The offshore yuan (CNH) spot rate, however, has begun to move away from onshore spot rates in August. CNH changed hands at 6.3885 to the dollar at the close.
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