China's yuan eased against the US dollar on Wednesday on some corporate demand for the greenback, while traders shrugged off rating agency Moody's decision to cut its sovereign rating on China. Moody's Investors Service downgraded China's long-term local and foreign currency issuer ratings on Wednesday, citing expectations the financial strength of the world's second-biggest economy would erode in the coming years.
The offshore yuan slipped on the Moody's news, but later recovered the loss. The People's Bank of China set the midpoint rate at 6.8758 per dollar prior to market open, weaker than the previous fix of 6.8661. In the spot market, the onshore yuan opened at 6.8935 per dollar and was changing hands at 6.8925 at midday, 35 pips weaker than the previous late session close and 0.24 percent softer than the midpoint.
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