Yuan falls for the third straight day in Hong Kong
Chinese currency falls in offshore trade, gains in Shanghai
The yuan traded slightly lower on Thursday, falling for a third day in a row, after the country’s central bank weakened its mid-price.
Offshore yuan in Hong Kong traded at 6.5106 to the US dollar, 0.12 per cent or 80 basis points weaker than on Wednesday.
Onshore yuan in Shanghai traded at 6.5018 to the US dollar at the same time, 0.12 per cent or 78 basis points stronger than on Wednesday.
The People’s Bank of China set the yuan reference point against the US dollar at 6.4954 on Thursday. That was 117 basis points or 0.18 per cent weaker than Wednesday.
Traders are allowed to trade up to 2 per cent either side of the reference point for the day.
The Japanese yen strengthened 2.07 per cent to trade at 109.14 to the US dollar at 11.05 am on Thursday after Bank of Japan (BOJ) said it would not expand monetary stimuli. The central bank maintained its negative 0.1 per cent deposit rate and its 80 trillion yen base money target. The move came as a surprise to the market.
“Policy disappointments could trigger negative market reactions. The BOJ would be mindful of such risks.” DBS said in a report.
The US Federal Reserve also left interest rates unchanged on Thursday morning but kept options open for an increase in June. It showed little sign of being in a hurry to tighten monetary policy amid an apparent slowdown in the US economy.
“The Federal Open Market Committee (FOMC) statement begins to open the door to a June policy rate hike by omitting language from the previous statement in March that global economic and financial developments continue to pose risks,” Rich Clarida, PIMCO’s global strategic advisor based in New York wrote in a note. “The FOMC acknowledges the obvious that labour market conditions have improved further even as growth appears to have slowed.”
The Bureau of Economic Analysis will release its initial estimate for first quarter US economic growth today.