SHANGHAI: China’s yuan barely moved from its morning midpoint fixing in light trading on Tuesday, when the dollar was steady in global markets.
Prior to market opening on Tuesday, the People’s Bank of China set its midpoint rate at 6.6399 per dollar, the weakest level since Oct. 30, and 52 pips or 0.08 percent weaker than Monday’s fix of 6.6347.
In the spot market, the onshore yuan opened at 6.6388 per dollar and was changing hands at 6.6398 at midday, unchanged from the previous late session close and only 1 pip firmer than the midpoint.
Market participants said a slew of weaker-than-expected October Chinese economic data released this week, including credit and activity indicators, had not impacted the yuan.
Traders said the market reflected balanced corporate demand and supply of the dollar at around the midpoint level.
“The market has not figured out a clear direction yet,” said a Shanghai-based trader at a foreign bank.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.67, firmer than the previous day’s 95.63.
The global dollar index slipped marginally to 94.48 from the previous close of 94.49.
The offshore yuan was trading 0.09 percent weaker than the onshore spot at 6.6458 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 6.793, 2.25 percent weaker than the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate.
Source: Brecorder.com
