The offshore yuan softened against the US dollar on Tuesday after at one point trading at a premium against the same day’s mid-price fix for the first time since November.
At 6.3710 against the greenback, the offshore yuan was weaker by 130 basis points from Monday’s close, ending the currency’s longest winning streak in one month.
The onshore yuan-US dollar cross rate hit 6.3642 against the greenback at 10:00 am, 12 basis points stronger from Monday’s close. The spread between the onshore yuan and its offshore counterpart has narrowed within the range of 100 pips.
The pullback came after the People’s Bank of China injected an additional 40 billion yuan worth of liquidity through seven-day reverse repurchase agreements.
The central bank set the benchmark midpoint price higher for a third day in a row at 6.3660 against the US dollar on Tuesday morning, stronger by 69 basis points from the previous mid-price fix.
The yuan has strengthened 2.16 per cent against the US dollar since August 25 when the currency traded at its weakest level in more than three years.