SHANGHAI: The Chinese yuan softened slightly on Thursday following a weaker official guidance rate from the central bank.
The spot rate opened at 6.2530 per dollar and e remained in a narrow range thereafter, changing hands at 6.2533 at midday. It closed at 6.2504 on Wednesday.
Traders said the currency has been moving mildly in response
to offsetting short-term seasonal factors, including demand for dollars to make dividend payments, which weakens the yuan, and an influx of dollars flowing into the market from offshore IPOs, which has the effect of supporting it.
Shares of Chinese e-commerce firm JD.com Inc soared 20 percent in their US market debut on May 22 as investors sought a piece of the China's booming online retail market, enabling the firm to raise $1.78 billion in its initial public offering. Traders said these funds, plus funds raised in other offshore IPOs, appeared to be entering the market after repatriation.
Traders believe that these forces, absent other unexpected developments in the interbank market, are likely to restrain the yuan in its current territory for the rest of the month.
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