SHANGHAI: China's yuan barely moved against the dollar on Tuesday as lingering expectations of moderate but steady appreciation this year offset fears of further volatility in emerging markets.
Spot yuan stood at 6.0596 per dollar by midday, almost unchanged from 6.0593 at Monday's close, indicating a balance of demand and supply in the domestic market, traders said.
The market reopened last Friday after a week-long Chinese Lunar New Year holiday, and trade has resumed gradually.
The yuan has largely held steady since the long holiday break and also in line with the central bank's guidance.
On Tuesday, the People's Bank of China set the daily yuan midpoint at 6.1069, only slightly lower than the previous price of 6.1083, indicating an official intention to keep the currency stable for now.
While traders said the recent depreciation in emerging market currencies had sparked some worries over the prospects of a strong yuan in the future, traders said China's healthy exports and trade surplus would ensure the currency's continued appreciation in the long term.
"Despite some worries over the health of emerging economies, the market believes that China will outperform, keeping the yuan relatively strong," said the foreign bank dealer.
Currency strategists polled by Reuters expect the yuan to trade at 6.04 against the dollar by April, 6.00 by July and 5.96 by January 2015.
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