Chinese yuan breaks winning streak to trade lower

PUBLISHED : Monday, 25 July, 2016, 12:04pm
UPDATED : Monday, 25 July, 2016, 12:04pm

China’s yuan currency traded slightly lower on Monday, reversing its winning streak from last week, after China’s central bank set a weaker fixing.

Onshore yuan in Shanghai decreased 0.01 per cent or 10 points at 6.6763 to the US dollar at 11.00 am on Monday.

Offshore yuan in Hong Kong traded at 6.6847 to the US dollar at 11.00 am, 0.03 per cent, or 22 points weaker than last Friday.

The People’s Bank of China on Monday set the yuan reference point against the US dollar at 6.6860, 191 basis points or 0.29 per cent weaker than on Friday.

Traders are allowed to trade up to 2 per cent either side of the reference point for the day.

“Unsurprisingly, the PBOC peg came in this morning with a weaker yuan midpoint setting,” said Stephen Innes, senior trader at Oanda Asia Pacific. “This week will be light for the yuan, marked by Wednesday’s consumer confidence and industrial profit reports.”

The US Federal Reserve will make another interest rate decision this week.

In other currency trading, the Japanese yen weakened slightly, falling 0.33 per cent to 106.45 per dollar. The yen jumped nearly 1 per cent last Thursday and at one stage touched 107.49 – the strongest level since June 9.

Bank of America Merrill Lynch said on Friday the so-called helicopter money – extraordinary monetary stimulus – will not come soon.

The British pound also traded weaker, down 0.15 per cent to US$1.3126 on Monday morning while the euro strengthened, up 0.04 per cent at 1.0969.