Wednesday, 13 June 2012 09:40
SHANGHAI: The yuan was little changed on Wednesday, as uncertainty about the eurozone debt crisis kept the market in a wait-and-see posture.
Relatively small changes in the central bank's daily fixings over the last week, despite the spot rate trading 0.6-0.8 percent weaker suggest that authorities are willing to tolerate a moderately weak yuan, traders say.
The People's Bank of China (PBOC) set its midpoint 21 pips stronger at 6.3271 on Wednesday after the dollar weakened slightly overnight.
The PBOC expanded the yuan's allowable trading band against the dollar in mid-April, allowing it to rise of fall 1 percent every day, compared to 0.5 percent previously.
Despite the wider band, a series of markedly stronger midpoints - perhaps accompanied by behind-the-scenes yuan buying by the PBOC - could still pull the yuan's value higher, if authorities chose to take such steps.
But traders say the central bank is increasingly willing to let the yuan rise ...