- Prior to market opening, PBOC set the midpoint rate at 6.4613 per dollar, 82 pips or 0.13% firmer than the previous fix of 6.4695
SHANGHAI: China's yuan ticked higher against the dollar on Tuesday on a firmer official guidance, with investors awaiting minutes from the Federal Reserve's last policy meeting and China's June inflation data before betting on the currency's move.
Traders said the two events could bring some volatility to the yuan trading as the Fed minutes due on Wednesday could offer more details on US policymakers' thinking over the timing to pare back stimulus, while China's consumer inflation data due out on Friday could influence the People's Bank of China stance on tightening monetary policy.
Prior to market opening, PBOC set the midpoint rate at 6.4613 per dollar, 82 pips or 0.13% firmer than the previous fix of 6.4695.
In the spot market, onshore yuan opened at 6.4619 per dollar and was changing hands at 6.4617 at midday, 22 pips firmer than the previous late session close.
Strategists at OCBC Bank said the sentiment was neutral as the yuan traded in the "middle of the multi-session range between 6.44 and 6.49 per dollar".
"Preference is to buy dips towards range lows at 6.4400/500," they recommended in a note.
Meanwhile, some analysts said both official and private surveys in June showed that the services sector was still expanding, but not as fast.
"The weakening price growth in the services industry once again underlines the muted transmission of PPI to service CPI, suggesting that our forecast of limited CPI inflationary pressures remains on the right track," Song Shanshan, economist for Greater China at HSBC, said in a note.
Song expects the PBOC would not rush into tightening and was likely to keep lending benchmark rate unchanged through the end of next year.
By midday, the global dollar index fell to 92.142 from the previous close of 92.247, while the offshore yuan was trading at 6.4633 per dollar.