Yuan rises for the fourth day ahead of G20 ministers meeting

PUBLISHED : Friday, 22 July, 2016, 11:59am
UPDATED : Friday, 22 July, 2016, 2:43pm

The Chinese yuan edged higher on Friday, extending its strengthening streak to a fourth straight day following a stronger fixing by China’s central bank ahead of this weekend’s G20 ministers meeting in Chengdu.

The onshore yuan in Shanghai rose 0.06 per cent or 40 basis points to 6.6695 against the US dollar at 10.15am, with the offshore yuan in Hong Kong edging up 0.02 per cent or 12 pips to 6.6781 per dollar.

The onshore yuan has rallied for four days in a row, climbing 0.25 per cent so far this week. The offshore yuan has also strengthened for three consecutive days, with a gain of 0.46 per cent for the week.

The People’s Bank of China on Friday set the yuan reference point at 6.6669 against the US dollar, up 203 basis points or 0.3 per cent from Thursday’s fixing, reflecting its strongest level since July 5.

“There has been little appetite to buy US dollars ahead of the G20 meeting in China this weekend as China’s state owned banks aggressively sell US dollar,” Stephen Innes, senior trader at OANDA Asia Pacific said.

“The PBOC’s comfort zone is evidently below the 6.70 mark, pre-G20,” he said.

In other currency trading, the Japanese yen weakened slightly, falling 0.09 per cent to 105.89 per dollar.

The yen jumped nearly 1 per cent on Thursday and at one stage touched 107.49--the strongest level since June 9. Bank of Japan governor Haruhiko Kuroda, in a BBC Radio programme recorded on June 17 and aired on Thursday, said that there is “no need and no possibility” for extraordinary monetary stimulus, or so-called helicopter money, under the country’s current policy rate regime.

The British pound moved a little, weakening 0.02 per cent to US$1.3229 on Friday morning while the euro fell 0.02 per cent to US$1.1024, after the European Central Bank, as expected, left interest rates unchanged at its meeting on Thursday.