SHANGHAI/BEIJING: China's yuan ended Thursday's domestic trading session at the weakest level in 10 days, breaching a key threshold, pressured by heavy demand for dollars from state banks and oil firms.
The onshore yuan opened at 6.3985 per dollar and finished the domestic session at 6.4006, 91 pips weaker than previous late night session.
The weakness in the yuan came as major state-owned banks were spotted buying dollars in onshore spot market to push the yuan to the weaker side of the psychologically important 6.4 per dollar level, three sources said.
The sources were not entirely sure if the dollar buying by state banks was on behalf of their corporate clients, given the increase in dollar demand from oil firms has also pressured the yuan.
The yuan's domestic closing price could affect the following day's official midpoint fixing, and the spot market is only allowed to trade within a narrow band of 2% on either side of that day's guidance rate.
Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.3957 per dollar, 101 pips weaker than the previous fix of 6.3856.
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