China's yuan stayed flat against the dollar on Thursday after the central bank set the midpoint rate slightly firmer for the fifth consecutive day and dollar demand was tepid. Traders said there was no strong demand for dollars even as the dollar firmed. The overnight dollar index was up 0.1 percent on Thursday after easing 0.5 percent the previous day.
The change in the index came after the Federal Reserve offered little in the way of surprises, suggesting its concern about global events had diminished but not squashed chances of a rate increase in March. The People's Bank of China set the midpoint rate at 6.5528 per dollar prior to market open, 0.01 percent firmer than the previous fix 6.5533. The spot market opened at 6.5780 per dollar and was changing hands at 6.5777 at midday, almost unchanged from the previous close.
On Thursday, offshore yuan was trading 0.52 percent softer than the onshore spot rate at 6.6121 per dollar. The onshore yuan weakened 0.2 percent against the euro to 7.1653. It firmed 0.4 percent against the Japanese yen, hovering at 5.5417 to 100 yen. "Trading remained steady as the central bank kept defending the line on midpoint," said a trader at a foreign bank in Shanghai. "There is no surge in dollar demand yet though the dollar index went up."