China's currency is on track for its third biggest weekly loss against the dollar this year as a resurgent greenback finally caught up with the renminbi in the Asian currency complex. In early trades on Friday, the yuan fell quickly past a key technical level of 6.2271 - the 76.4 percent retracement of the May to October range - despite tepid moves in the broad dollar index. The yuan closed at 6.2163 per dollar on Thursday.
The weakness in the economy has led to calls for more government stimulus measures and a cut in banks' reserve requirements after a surprise interest rate cut last month raising concerns the currency may remain weak in the near term. Despite the 0.6 percent fall against the dollar so far this week, market conditions remain orderly with the gap between the currency traded in the offshore and the onshore market remaining below levels seen earlier this year.
On Friday, China's central bank fixed the daily midpoint at 6.1205 per dollar compared with 6.1195 on Thursday. In the derivative markets, both non-deliverable and deliverable offshore forward rates in the Chinese currency reflected the weakness in the spot rate and edged higher.
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