The People’s Bank of China set the midprice fix of the yuan at 6.3436 against the US dollar on Friday, 34 basis points or 0.05 per cent, weaker than the previous day’s fix. Markets have taken their cue from the central bank as both onshore (CNY )and offshore yuan (CNH) were trading at weekly lows on Friday. CNY touched 6.3555 to the dollar, while CNH dropped to 6.3583 to the greenback. The Singapore dollar continued to weaken, trading at 1.3817 against the dollar. Pound/dollar rose 0.10 per cent to 1.5467. Euro/dollar declined 0.05 per cent to 1.1376. Dollar/yen strengthened 0.23 per cent to 119.14. The sterling has staged a rally since the end of September, gaining 2.3 per cent so far, but Capital Economics said the trend will likely reverse as it predicted it would fall to fall to 1.40 by end-2016. “This is largely based on our view of the prospects for monetary policy in the US and UK. Expected interest rates in both countries have fallen recently in response to concerns about China in particular. “However, we do not expect the health of China’s economy to prevent monetary policy from being tightened in the US and the UK next year. That being said, we expect the increase in the key policy rate to be significantly larger in the US than in the UK, thereby causing the gap between these two rates to change by much more than either the average investor or economist expects,” Capital Economics said in a note on Friday.