China's yuan eased against the US dollar on Tuesday, after a lower setting for the official midpoint and slightly stronger corporate demand for the greenback, which is weakening. The global dollar index, a gauge that measures the unit's strength against six other major currencies, slipped to 92.901 at midday from the previous close of 92.904. The dollar has weakened as markets await developments on US tax reform bills.
Prior to market opening on Tuesday, the People's Bank of China (PBOC) set the midpoint rate lower for a third straight day at 6.5944 per dollar, 70 pips or 0.11 percent below the previous fix of 6.5874. The onshore yuan opened at 6.5985 per dollar and was changing hands at 6.6052 at midday, 77 pips weaker than the previous late session close and 0.16 percent softer than the midpoint.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.10, weaker than the previous day's 95.15. The offshore yuan was trading 0.02 percent weaker than the onshore spot at 6.6063 per dollar.
Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.7615, 2.47 percent weaker than the midpoint.
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