Yuan strengthens, reversing previous days’ declines
Offshore yuan in Hong Kong broke its five-day decline to trade 0.13 per cent or 91 points higher at 6.8628 against the US dollar by 1pm. On Monday morning, it had reached its weakest level in a month at 6.8764.
China’s yuan traded stronger on Tuesday, as did the still dollar strengthening.
Offshore yuan in Hong Kong broke its five-day decline to trade 0.13 per cent or 91 points higher at 6.8628 to the US dollar at 12.55 pm. On Monday morning, it had reached its weakest level in a month of 6.8764.
Onshore yuan in Shanghai also jumped, up 0.06 per cent or 44 points higher at 6.8780.
The People’s Bank of China on Tuesday set the yuan reference point stronger from the lowest level in four weeks. The yuan reference came 92 basis points or 0.13 per cent stronger at 6.8806 against the US dollar.
Traders are allowed to trade up to 2 per cent either side of the reference point for the day.
“The weakening pressure on the Chinese yuan expects to ease in a short time as the interbank money rates edged up,” said Li Weijie, an analyst from SDIC Essence Future in a report. “ Chinese yuan will have ‘two-way’ movement until it reaches the level of 7.2 in 2017.”
The US dollar weakened, with the US dollar index down 0.12 per cent to 100.84.
In other currency trading, the pound was up 0.1 per cent to US$1.2536 on Tuesday afternoon while the euro jumped 0.12 per cent to US$1.0611.
The Japanese yen was down 0.29 per cent at 113.39 per dollar. Last Friday, President Trump pledged closer security and economic cooperation with Japan.