SHANGHAI: China’s yuan remained largely steady on Friday, while the dollar hovered close to an eight-week low on Friday, ahead of a crucial US jobs report that should provide clues on when the Federal Reserve will start to cut interest rates.
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 7.1106 per US dollar, firmer than the previous fix of 7.1108. In the spot market, the onshore yuan opened at 7.2439 per dollar and was changing hands at 7.2457 at midday, 10 pips weaker than the previous late session close. The Chinese currency has fallen around 2% on the dollar so far this year.
Market moves were largely subdued as traders stayed on guard ahead of Friday’s US nonfarm payrolls report, where expectations are for the world’s largest economy to have added 185,000 jobs last month.
“Readings in line with or close to the expectations should keep the DXY (Dollar Index) and UST (US Treasury bond) yields we believe steady but more substantial moves could come if the readings fell much lower than estimates or came out well above it,” Maybank analysts said in a note.
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