SHANGHAI: China’s yuan was largely steady on Wednesday, off a five-month low it hit in the previous session, as the dollar weakened after data showed US business activity cooled in April to a four-month low.
China’s major state-owned banks also were seen swapping yuan for US dollars in the onshore swap market and selling those dollars in the spot market to support the yuan.
The yuan was trading at 7.2456 per dollar at 0415 GMT, barely changed from the previous close.
The central bank’s stronger-than-expected daily benchmark fixings and support from state-owned banks have slowed its decline but it hit a 5-month low of 7.2477 on Tuesday.
The currency is down 2.1% this year, pressured by its relative low yields versus other currencies, a wobbly economy, and outflows of foreign investment from an anaemic stock market.
Prior to the market open, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1048 per US dollar, firmer than the previous fix of 7.1059.
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