Chinese yuan softens against the US dollar as investors await US jobs data
Most major currencies fall against the greenback
China’s yuan softened Friday morning against the US dollar, as traders take watch-and-see attitude before a US employment report due later in the day, which will be key to the Federal Reserve’s rate decision in September.
The onshore yuan, which trades in Shanghai, dropped 0.12 per cent or 81 basis points to 6.6794 per US dollar on Friday morning.
The offshore yuan trading in Hong Kong stood at 6.6871 per US dollar, weaker by 0.03 per cent or 20 basis points.
Earlier in the day, the People’s Bank of China fixed the yuan’s mid-point rate against the US dollar at 6.6727, 57 basis points or 0.085 per cent stronger than Thursday’s fixing.
Traders are allowed to trade up to 2 per cent either side of the reference point for the day.
Most major currencies weakened against the greenback, as traders awaited the US non-farm payrolls data for August due to come out at 8:30pm Hong Kong time.
The British pound fell for three days in a row, down 0.13 per cent to trade at US$1.3285 on Friday morning. The euro dipped 0.02 per cent to US$1.199.
The Japanese yen also weakened versus the US dollar, trading 0.11 per cent lower at 103.33.
Analysts said Friday’s US non-farm payrolls data could provide further clues about the strength of the US economy and will be a key factor in the Fed’s rate decision at the September meeting.
“Position adjustment ahead of tonight’s critical NFP (non-farm payrolls) should dominate today’s foreign exchange landscape,” said Stephen Innes, senior trader at Oanda, in a Friday report.
Recent data showed the US private payrolls grew at a steady pace in August and rose by 177,000, after increasing 194,000 jobs in July.
However, the US factory activity disappointed in August.On Thursday, the Institute for Supply Management said its manufacturing index fell to 49.4 in August from 52.6 in July. The 50 mark separates growth from contraction.