Onshore yuan on track for a ninth session skid
Onshore Chinese yuan weakened against the US dollar on Tuesday, putting it on track to log a ninth straight session of losses.
In the spot market in Shanghai, the US dollar was trading at 6.8426 yuan as of 11.20am, up 0.02 per cent from 6.8411 late Monday.
The onshore yuan has weakened by 0.8 per cent since mid-June.
“It’s normal for the yuan to have a pull back due to the recent strength in the US dollar. Plus, June and July are a traditional peak season in China with high demand in foreign currencies, ” said Meng Xiangjuan, an analyst for Shenwan Hongyuan Securities.
She anticipated the yuan would fluctuate within a tight range in the near term, while expecting the rate to slightly strengthen to 6.8 to 6.9 by year-end due to improved capital outflow situations.
Nonetheless, the offshore yuan bounced back in Hong Kong following recent declines. The US currency bought 6.8492 yuan, down 0.07 per cent compared with 6.8542 late Monday.
Earlier in the day, the People’s Bank of China set the yuan’s mid-point rate at 6.8292 versus the US dollar, weaker by 72 basis points from Monday’s fix.
In other forex trading, the ICE US Dollar Index, which gauges the greenback’s performance against six currency peers, dropped 0.03 per cent to 97.393.
Against the Japanese yen, the US dollar strengthened 0.04 per cent to 111.9.
The euro firmed against the US dollar, up 0.06 per cent to US$1.1189 from US$1.1182 in the prior session, while sterling softened, down 0.02 per cent to US$1.272.