SHANGHAI: China's yuan fell against the dollar on Monday as companies tended to buy dollars in anticipation that the Chinese currency would remain relatively weak in the near term, traders said.
Spot yuan stood at 6.2072 per dollar by midday, 0.06 percent weaker than Friday's close also after the People's Bank of China (PBOC) fixed its official midpoint at 6.1485 per dollar, down 0.03 percent from Friday's fix.
The yuan opened at 6.2034 per dollar, which traders said signalled that the market was cautious about not quoting above the psychologically important 6.20 mark.
"Traders appear not willing to quote above the psychological resistance for now after the PBOC signalled its intention to keep the yuan below that level via its midpoint," said a trader at a foreign bank in Shanghai.
Despite using its midpoint to guide the Chinese currency's movements, the PBOC has largely refrained from intervening in
the market to influence the yuan's value recently, a trend traders expect to continue in the short term.
"The current price range does not touch the central bank's nerve as it is actually under control," a trader at an Asian bank in Shanghai said.
"Before the release of Q2 GDP data on Wednesday, the yuan's value will continue to move within a narrow range without effectively rising above 6.20."
Spot yuan has moved in a tight range around that level since touching an intraday high of 6.1940 per dollar on July 9, its highest level since April 9.
China's economy probably steadied in the second quarter with annual growth holding firm at 7.4 percent, a Reuters poll showed, suggesting that a recovery is taking hold as a flurry of government stimulus measures kick in.
Comments
Comments are closed for this article.