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Currencies

China’s yuan languishes near one-month lows in morning trade

The US dollar extends advance on expectations Fed will hike interest rates at December meeting

PUBLISHED : Wednesday, 11 November, 2015, 12:40pm
UPDATED : Wednesday, 11 November, 2015, 12:54pm

The yuan traded close to a one month low Wednesday morning, as the US dollar extended its gains against major currencies.

The US dollar was buying 6.3617 yuan at 10.50 am, representing a 0.02 per cent weakening in the Chinese currency from Tuesday close, and just shy of its one-month low of 6.3671 set on Monday.

In the offshore market, the currency pairing was at 6.3904, representing a 0.04 per cent gain for the Chinese currency from Tuesday close when it hit a one-month low at 6.3948.

The People’s Bank of China set the mid point for the yuan at 6.3614, representing a 12 basis point drop, and the seventh straight session of weaker settings. The currency is permitted to fluctuate 2 per cent on either side of the reference mid-point on any single trading day.

“The US has likely decided to increase interest rates in December. The coming Thanksgiving festival is also expected to see a strong consumer spending as the US employment market has improved,” said asper Lo Cho-yan, director of Tung Shing Futures,

“It is likely the yuan will continue to trade at the current weak levels as a result of the strong US dollar.”

In other currency trading Wednesday, the Euro was at 1.0755 to the US dollar, rising 0.29 per cent. The US dollar was buying 122.90 yen, easing 0.2 per cent and the pound was buying 1.5169 dollars, firming by 0.19 per cent.