China’s yuan edges down as dollar gains; investors watch Iran war talks

HONG KONG: China’s yuan ticked lower against the US dollar on Thursday, as the greenback strengthened on uncertainty about ceasefire negotiations for the war in Iran.

 The spot yuan opened at 6.9043 per dollar and was last trading at 6.9047 at 0305 GMT, 61 pips lower than the previous late-session close.

The offshore yuan traded at 6.9088 yuan per dollar, down about 0.06%.

Iran’s foreign minister on Wednesday said the country is reviewing a US proposal to end the war, but it has no intention of holding talks to wind down the widening Middle East conflict.

The dollar’s six-currency index was 0.046% higher at 99.67 in Asian trade, having jumped 2% this month as the Iran war triggered a rush for haven assets.

Given there is no major breakthrough in the Middle East conflict, “the dollar index has remained rangebound at elevated levels … and the yuan has moved largely in sync with the dollar, with no clear directional trend,” analysts at Nanhua Futures said in a note.

The yuan has held steady this month even as some other Asian currencies dropped to fresh lows versus the dollar due to concerns about rising energy costs.

 Before the market opened on Thursday, the People’s Bank of China set the midpoint rate at 6.9056 per dollar, its weakest since March 16 and 52 pips firmer than a Reuters estimate.

The spot yuan is allowed to trade a maximum of 2% either side of the fixed midpoint each day.

The yuan is down 0.7% against the dollar this month, though it is 1.3% firmer so far this year.