SHANGHAI: China's yuan softened against the dollar on Monday in tepid trading after the central bank set a moderately weaker midpoint in a sign of further stability of the Chinese currency.
"Trading was thin as many investors and even traders have been on vacation at the year-end," said a dealer at a Chinese commercial bank. "The trading volume is estimated around $10 billion today."
That approached the lowest daily trading volume this year, at around $8 billion in mid-June.
The People's Bank of China, prior to market open, set the midpoint rate at 6.475 per dollar, or 0.06 percent weaker than the previous fix of 6.4713.
The spot market opened at 6.4766 per dollar and was changing hands at 6.4776 at midday, or 0.02 percent weaker than the previous close.
The yuan edged up steadily last week, marking its first weekly rise in eight weeks, of around 0.15 percent.
The new trade-weighted yuan exchange rate index, issued by the market, the China Foreign Exchange Trade System (CFETS), on Friday stood at 100.87, down 0.6 percent from its level at the
end of the previous week.
China has begun issuing the yuan exchange rate against a basket of currencies since mid-December, in a move to discourage investors from exclusively tracking the yuan's fluctuations against the US dollar. So far, the CFETS publishes the index on its website every Friday.
On Monday, onshore yuan was trading against the euro at 7.1072, almost unchanged from the prior close. It also barely moved against the Japanese yen at 5.3803 to 100 yen by midday.
The offshore yuan was trading 0.92 percent weaker than the onshore spot, at 6.538 per dollar.
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