The yuan eased on Tuesday as mixed Chinese trade data did little to dispel the view that the central bank will allow little or no currency appreciation in the near term. Spot yuan closed at 6.3115, 30 pips weaker than Monday's close, after the central bank set a mid-point of 6.3048, 27 points weaker than Monday's fix. March trade data releasedon Tuesday showed that China's exports grew faster than expected, while import growth eased from a 13-month peak.
The market's reaction was muted, with dealers saying supply and demand in China's onshore forex market is mainly driven by demand from corporates, who are less sensitive than financial institutions to every twist and turn in macroeconomic data. "The market reaction wasn't significant, but actually this data wasn't very good," said a dealer at an Asian bank in Shanghai, adding that other dealers took a different view. The yuan has fluctuated in a narrow range between 6.29 and 6.34 since touching an all-time high of 6.2914 on the first trading day of the year, and there are few signs of significant movement in the near term.
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