Yuan reverses decline to trade stronger on Tuesday afternoon

PUBLISHED : Tuesday, 10 January, 2017, 3:08pm
UPDATED : Tuesday, 10 January, 2017, 3:08pm

China’s yuan reversed a two-day decline to trade stronger on Tuesday afternoon.

Onshore yuan in Shanghai was trading at 6.9248 to the US dollar at 2.10pm, 0.16 per cent or 113 points stronger than on Monday.

Offshore yuan in Hong Kong traded at 6.8742 to the US dollar , 0.06 per cent, or 38 points stronger than on Monday.

The People’s Bank of China on Tuesday set the currency’s reference point against the US dollar at 6.9234, 28 basis points or 0.04 per cent stronger than on Monday.

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

The Hong Kong Interbank Offered Rate for offshore yuan, known as the CNH Hibor, plummeted 7 percentage points to 6.81517 per cent.

The US dollar index retreated, falling 0.28 per cent to 101.64.

On Wednesday, President-elect Donald Trump will hold his first news conference since his election win. Investors are concerned that Trump may introduce protectionist measures against China.

Currency traders will be watching closely to see whether he will declare China is a currency manipulator after he takes office on January 20.

Ming Ming, chief fixed-income analyst at Citic Securities, expected the Chinese yuan to slide by a further 2 to 3 per cent in 2017.

In other currency trading, the British pound was 0.09 per cent weaker at 1.2147 against the greenback, while the Japanese yen advanced 0.48 per cent to 115.45 per US dollar.