China's yuan eased against the US dollar on Friday on slightly heavier corporate demand for the greenback, but losses were capped as market participants awaited a central bankers' conference for clues on further US monetary tightening. The Chinese currency is set to finish flat against the dollar for the week and has gained 4.2 percent so far this year, supported by the US currency's broad weakness as well as Beijing's tighter controls on capital outflows.
Prior to Friday's market opening, the People's Bank of China set the yuan's midpoint rate at 6.6579 per dollar, 54 pips or 0.08 percent weaker than the previous fix 6.6525. In the spot market, the yuan opened at 6.6605 per dollar and was changing hands at 6.6660 at midday, 20 pips weaker than the previous late session close and 0.12 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 94.87, weaker than the previous day's 94.89.
The offshore yuan was trading 0.06 percent firmer than the onshore spot at 6.6617 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 6.8105, 2.24 percent weaker than the midpoint.
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