Offshore yuan holds its ground against US dollar ahead of China’s forex reserves data for March
The yuan traded in Hong Kong was little changed on Thursday, ahead of China’s foreign-exchange reserves announcement and after the currency settled Wednesday at its lowest level since the start of the second quarter.
The offshore yuan was at 6.4833 to the US dollar at midday on Thursday, 29 basis points or 0.04 per cent weaker than Wednesday when it closed regular trade at 6.4937, its weakest level this month.
In Shanghai the yuan exchanged hands at 6.4690 per dollar, 0.1 per cent or 68 basis points stronger than Wednesday.
The People’s Bank of China set the yuan reference rate against the US dollar at 6.4707 on Thursday, 47 basis points or 0.073 per cent stronger than the fix on Wednesday. Thursday’s reference rate reverses three consecutive days of a weaker midpoint setting.
Yao Wei, chief China economist at French bank Societe Generale expected data today to show China’s foreign-exchange reserves increased in March from a month earlier.
Currency analysts cautioned that China’s currency would likely trend lower.
“We believe this is stability is temporary,” said Heng Koon-how, senior investment strategist at Credit Suisse. “The existing fundamentals for China remain weak and we will get more confirmation of this in the latest round of macroeconomic numbers from China.”