SHANGHAI: China's yuan edged lower against the dollar on Thursday as traders reported lower-than-expected corporate dollar sales despite data showing an unexpectedly large trade surplus in January.
Spot yuan changed hands at 6.0651 per dollar at midday, 0.04 percent weaker than Wednesday's close. The exchange rate fluctuated within a narrow range between 6.0640 and 6.0662 during morning trade.
The dip in the yuan's value tracked the central bank's daily midpoint, which was set at 6.1100, 0.04 percent weaker than Wednesday's fixing.
Traders said there were also signs of central bank intervention aimed at keeping the yuan stable around the current value. Major state-owned banks were seen buying dollars.
"Corporate dollar sales were quite weak this week in comparison with the January foreign trade data," said a dealer at a major Chinese commercial bank in Shanghai.
"And state-owned banks appeared to buy dollars in the market, leading the yuan to weaken slightly today."
China surprised markets with a thumping trade performance in January, with trade surplus rising to $31.9 billion in the month, well above forecasts of $23.7 billion and December's $25.6 billion, drawing some scepticism about the data.
Analysts who had expected the long Lunar New Year holiday to drag on January's trade warned that the figures may be inflated by fake trade transactions, where traders forge deals to sneak cash into the country past capital controls.
China's central bank also appears to favor yuan stability as it seeks to prevent the capital outflows that have afflicted other emerging markets in recent weeks.
Traders expect the yuan to hover around 6.06 in the coming weeks.
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