HONG KONG/SHANGHAI: China's yuan rebounded slightly against the dollar on Tuesday, but trading kept to a tight range as offshore investors were wary over continuing protests in Hong Kong and ahead of a holiday.
The Chinese currency fell in Hong Kong trading on Monday on nervousness over the pro-democracy protests. Although tens of thousands of protesters extended a blockade of Hong Kong streets on Tuesday, traders said it was having little direct impact so far.
The offshore yuan strengthened past the 6.17 per dollar line in early trades and held gains at 6.1656 by midday, up from Monday's close of 6.1782.
"We are still seeing some (U.S) dollar buying at the day's highs so it indicates that sentiment is still a bit cautious," said a trader at a European bank in Hong Kong.
Onshore yuan, which usually shows only muted reaction to offshore events, rose to 6.1457 per dollar from Monday's close of 6.1501, buoyed by a slightly strong official midpoint set by the central bank at 6.1525 against Monday's 6.1539.
The Hong Kong market will be closed on Wednesday and Thursday, while the mainland markets will be closed until Oct 7 for China's National Day holiday.
Underscoring investor nervousness, trading in the Hong Kong dollar remained hectic and volatile with the currency moving in a broad 7.7617-7.7693 broad range, traders said.
Hong Kong shares extended their falls, sliding 1.2 percent by midday after declining 1.9 percent on Monday on the protests.
For the quarter, the onshore yuan is set to appreciate 1 percent, buoyed by China's importing exports and heavy trade surpluses.
But given a slew of weak economic data, traders expect Beijing may allow the yuan to depreciate again in coming months after a round of depreciation in the first four months of this year.
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