China’s yuan eases slightly, ending two days of gains against greenback
The Chinese yuan traded slightly lower on Thursday morning, sliding after two consecutive days of gains and reversing from a stronger daily fix for the currency by China’s central bank.
The onshore yuan in Shanghai was down 45 basis points or 0.07 per cent to 6.6805 per US dollar after rising for two days in a row. The offshore yuan in Hong Kong fell 0.1 per cent or 68 pips to 6.6837 against the green back.
The declines came as the People’s Bank of China on Thursday set the yuan reference point at 6.6872 against the US dollar, up 74 basis points or 0.11 per cent than on Wednesday, reflecting the strongest level this week.
In Japan, the yen extended its depreciation for a second consecutive day, easing 0.37 per cent to 107.21 against the US dollar, its weakest level since June 7. Japanese media Kyodo reported that the government is planning to launch a stimulus package which worth at least 20 trillion yen (HK$1.4 trillion).
The report, said the government, led by prime minister Shizo Abe, will seek cabinet approval in August to launch the stimulus.
Separately, the Bank of Japan will have a monetary policy meetings on July 28 to 29.
“There still are expectations for helicopter money among some market participants, making it hard for the central bank to respond appropriately. Notably, experience over the past six months indicates that caution is warranted for potential yen appreciation and stock market weakness after the monetary policy meeting,” Daiwa Securities analyst Eiji Kinouchi wrote in a note.
In other trading, the British pound gained 0.06 per cent to US$1.3216 on Thursday morning with the euro rising 0.04 per cent to US$1.1017, ahead of a European Central Bank meeting on Thursday.
“Following the Bank of England’s decision last week to leave policy unchanged, this meeting might well be a non-event policy-wise, with the Governing Council perhaps content to wait until September’s meeting – when it will have new updated forecasts – before deciding whether to act again,” Daiwa Capital Markets’ economic research team wrote in a note.