China's yuan weakened against the dollar on Friday weighed by corporate demand for the greenback, while traders awaited US jobs data later in the global session for clues on the timing of the Federal Reserve's plans for further monetary tightening. The Chinese currency remains on course for the fourth straight winning week. During the month of July, it strengthened around 0.8 percent against the dollar, the first time since 2014 that the yuan gained for three consecutive months.
Market watchers attributed recent gains in the yuan to a struggling dollar and Beijing's capital control measures that have flushed out most yuan bears. On Friday, the People's Bank of China set the midpoint rate at 6.7132 per dollar prior to market open, the strongest in nearly 10 months, and firmer than the previous fix of 6.7211. Spot yuan opened at 6.7195 per dollar and was changing hands at 6.7195 at midday, 20 pips weaker than the previous late session close and 0.09 percent softer than the midpoint.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 93.82, weaker than the previous day's 93.91. The global dollar index fell to 92.77 from the previous close of 92.839. The offshore yuan was trading 0.06 percent weaker than the onshore spot at 6.7233 per dollar.
Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.8665, 2.23 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
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