New | China’s yuan gains further, means more pain for manufacturers
China’s yuan strengthened against the US dollar on Thursday trading after a key manufacturing output report showed the sector had contracted for a third month running.
The onshore yuan-US dollar cross rate hit 6.2026 against the greenback at 10:00 am, a 12 basis point move from Wednesday’s close.
The yuan has strengthened 1.15 per cent against the US dollar since March 3, though its performance month to date has been flat and the currency has moved within a tight trading range.
The flash HSBC Markit Purchasing Managers Index fell to 49.1 in May with output shrinking at the fastest rate in over a year. A number below 50 indicates contraction.
The yuan’s rise means more pain for Chinese exporters, whose troubles were magnified by the US dollar’s overnight gain against other major currencies following the release of US Federal Reserve meeting minutes that confirmed no June US interest rate increase.
The People’s Bank of China set the benchmark midpoint price higher at 6.1139 against the US dollar on Thursday morning. The yuan can trade up or down by 2 per cent against the mid price each day. The yuan traded at 6.2030 against the US dollar at 10 am Thursday.
The Hong Kong dollar traded at 7.7523 against the US dollar Thursday morning, still close to the top end of its trading band.
