China's yuan nears six-week high as US yields ease
- The offshore yuan rose to its strongest level since March 12, touching 6.4805 before trimming gains to 6.4839 at midday.
SHANGHAI: China's yuan firmed to its strongest level against the dollar in nearly six weeks on Thursday as easing US Treasury yields took the greenback to multi-week lows against major currencies.
"We're continuing to watch the euro in the near term, which may put pressure on the US dollar index. If the index dips further toward 90, the yuan could test 6.45," said a trader at a foreign bank.
The yuan's strength came after the People's Bank of China set its strongest daily midpoint fixing for the yuan since March 18, at 6.4902 per dollar. It was also the first time since that date that the fixing had been set firmer than 6.5 per dollar.
Spot yuan opened at 6.4906 per dollar and strengthened to as much as 6.4828 at one point, its firmest since March 12. It eased to 6.4875 by midday but was still 28 pips firmer than Thursday's late session close.
The offshore yuan rose to its strongest level since March 12, touching 6.4805 before trimming gains to 6.4839 at midday.
The European Central Bank is set to keep policy unchanged in a meeting Thursday, but analysts say positive comments about the economic outlook or hints of tapering bond purchases could send the euro higher.
The meeting comes after a closely watched auction of US 20-year Treasuries drew strong demand, helping to put a cap on yields that had risen last month amid worries over accelerating inflation.
The global dollar index stood at 91.1, little changed from the previous close of 91.11.
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