New | China’s yuan retreats after three-day rally; midpoint at strongest in 15-months
Chinese currency weakened after a three-day rally against the US dollar on Friday morning, even as the central bank set the benchmark midpoint price at its strongest level in 15 months.
The onshore spot yuan weakened by 0.05 per cent, or 34 basis points, to 6.2050, while the offshore spot yuan lost 0.02 per cent, or 14 pips, to 602057 at noon.
The People’s Bank of China set the benchmark midpoint price at 6.1085 against the US dollar on Friday morning, the strongest level since February 18, 2014.
The strong stance by the PBoC was in response to the correction of the US dollar. The Dollar Index spot exchange rate was trading at 93.40 at noon, hovering around the weakest level in four months.
Traders shorted the dollar after the US Producer Price Index fell 0.4 per cent in April, below expectations for a 0.1 per cent increase from a month earlier, adding fresh signs that the US Federal Reserve may not hike the rates soon.
The euro was trading around a three-month high against the US dollar following the dollar retreat. In Asia, the Japan yen weakened 0.17 per cent to 119.38, the weakest level in around two weeks.
