China's yuan inched lower against the US dollar on Friday, reflecting strength in the greenback in global markets, but was on course to finish the week little changed. Prior to the market opening on Friday, the People's Bank of China (PBOC) set the midpoint rate lower for the 10th straight day at 6.6218 per dollar, weaker than the previous fix of 6.6195.
The streak of weaker official fixes is the longest since mid-November. Friday's guidance rate was also the weakest since November 22. In the spot market, the onshore yuan opened at 6.6180 per dollar and was changing hands at 6.6178 at midday, 38 pips weaker than the previous late session close. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.42, firmer than the previous day's 95.36.
The global dollar index rose to 93.823 from the previous close of 93.795. The offshore yuan was trading 0.08 percent weaker than the onshore spot at 6.6231 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 6.781, 2.35 percent weaker than the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate. China's exports and imports unexpectedly accelerated last month after slowing in October, an encouraging sign for the world's second-biggest economy which has started to slow in the face of a government crackdown on debt risks and factory pollution.
Comments
Comments are closed for this article.