Yuan weakens as dollar index rises
The yuan weakened on Friday as the dollar index rose, with traders awaiting clues on direction in a market that has fluctuated in a narrow band over the past weeks despite escalating trade tensions with the United States and concerns about the sustainability of China's growth.
By : migrator
Update: 2018-04-20 06:44 GMT
"There have been few triggers to move the market recently, and the currency is at the mercy of random market forces," said a trader at a foreign bank in Shanghai.
The dollar index rose slightly, on track for its fourth day of gains.
The People's Bank of China set the midpoint rate at 6.2897 per dollar prior to the market open, weaker than the previous fix 6.2832. The midpoint has weakened for the third day in a row.
The spot market opened at 6.2879 per dollar and was changing hands at 6.2855 at midday, 95 pips away from the previous late session close. The spot rate is currently allowed to trade with a range 2 percent above or below the official fixing on any given day.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 98.07, firmer than the previous day's 97.97.
The global dollar index rose to 89.953 from the previous close of 89.94.
The offshore yuan was trading 0.07 percent away from the onshore spot at 6.281 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 6.3765, -1.36 percent away from the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate.
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