SHANGHAI: The yuan edged up against a weaker US dollar on Wednesday, but gains were capped by investor worries over widening outbreaks of the highly contagious Delta variant in China and their potential impact on economic growth in the second half of the year.
China reported on Wednesday 96 new COVID-19 cases for Aug. 3. Although the number of cases remained small in absolute terms compared with other economies, the Delta coronavirus variant has been detected in at least a dozen cities, including big ones such as Beijing, Wuhan and Chongqing. Policy insiders and analysts told Reuters that China was poised to quicken spending on infrastructure projects while the central bank would support with modest easing steps, as risks from the Delta variant and flooding threaten to slow the economic recovery. Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate at 6.4655 per dollar, 45 pips or 0.07% weaker than the previous fix of 6.461. In the spot market, onshore yuan opened at 6.4652 per dollar and was changing hands at 6.4608 at midday, 92 pips firmer than the previous late session close.
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