Chinese yuan weakens after its recovery from a three-month low
Onshore yuan in Shanghai traded at 6.5570 to the US dollar despite the PBOC raising the reference point.
The Chinese yuan weakened on Thursday morning after it had recovered slightly from a three-month low.
Onshore yuan in Shanghai traded at 6.5570 to the US dollar at 10.30 am. That is 0.05 per cent, or 30 basis points, weaker compared with its closing price on Wednesday.
China’s currency had rebounded slightly after it tumbled to its lowest level against the US currency in three months on Wednesday after the country’s central bank set its weakest fixing in five years.
The People’s Bank of China (PBOC), the country’s central bank, on Thursday set the yuan reference point against the US dollar at 6.5552, 141 basis points stronger than on Wednesday. Traders are allowed to deal up to 2 per cent either side of the reference point for the day.
The currency traded offshore in Hong Kong at 6.5602 to the US dollar at 10.30 am. That is 0.06 per cent, or 40 basis points, stronger than Wednesday.
Jasper Lo Cho-yan, chief executive of King International Financial, said the onshore yuan will continue to weaken, reflecting concerns over a possible interest rate hike by the US Federal Reserve — central bank to the world’s largest economy — that put pressure on the Chinese currency.