The yuan edged marginally off a six-year low on Friday as some Chinese banks judged that depreciation pressure on the yuan had ebbed temporarily, and sold dollars to offset demand from corporate clients, traders said. One-week yuan/dollar forwards, in both the onshore and offshore markets, showed that the yuan would stabilise for the coming week, although derivatives indicated there were still bets on another round of yuan depreciation in coming months due to prospects for a US interest rate hike, they said.
The People's Bank of China (PBOC) set the midpoint rate at 6.7858 per dollar prior to market open, weaker than the previous fix 6.7736. The spot market opened at an intraday low of 6.7856 per dollar, its weakest since September 2010, but rebounded to change hands at 6.7797 by midday, a mild 0.03 percent bounce from the previous close.