SHANGHAI: China’s yuan weakened against a strong greenback on Wednesday, despite a steady midpoint fixing, with traders cautiously awaiting the country’s delayed economic indicators and more clues on policy from the ongoing Communist Party Congress.
In the spot market, the yuan opened at 7.2000 per dollar and was changing hands at 7.2197 at midday, 221 pips weaker than the previous late session close.
The People’s Bank of China set the midpoint rate at 7.1105 per dollar prior to market open, a level that barely changed over the past week.
The steady fixing is designed to anchor the yuan ahead of, and during the week-long Communist Party Congress that opened on Sunday, analysts said.
“The PBOC’s steady CNY fixing guidance was fully priced in and effective to cap the upside of USD/CNY at around 7.25 level ... but no longer boosts RMB sentiment,” said Ken Cheung, Chief Asian FX Strategist at Mizuho Bank.
“In the absence of China key data releases, all eyes will be on the 20th Party Congress,” Cheung added.
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