China’s yuan slides for a sixth straight session in Hong Kong

PUBLISHED : Monday, 10 April, 2017, 12:46pm
UPDATED : Monday, 10 April, 2017, 12:47pm

China’s yuan lower on Monday after the People’s Bank of China set the daily reference rate at three-week low.

The onshore yuan in Shanghai was trading at 6.9074 to the US dollar at 11.00am, 0.14 per cent weaker than on Friday, reflecting its fourth straight session of losses. The offshore yuan in Hong Kong traded weaker for the sixth trading day, easing 0.13 per cent to 6.69074 to the US dollar. Both the onshore and offshore yuan quotes were at the weakest levels recorded so far in April.

The People’s Bank of China on Monday set the yuan reference point against the US dollar at 6.9042, 93 basis points or 0.13 per cent weaker than on Friday.

The US dollar increased 0.12 per cent to 101.3 on Monday following volatile trading on Friday after March’s mixed job report prompted investors to offload and reload dollar positions, said Lukman Otunuga, research analyst at FXTM. The US added 98,000 jobs in March, below market expectation of 180,000 increase. The unemployment rate fell to 4.5 per cent from 4.7 per cent.

“Although the disappointing headline nonfarm payrolls figure was a tepid 98,000 in March, the jobless rate unexpectedly dropped to the lowest level in almost 10 years at 4.5 per cent,” Otunuga added.

“The immediate market reaction has seen expectations rapidly diminish over the Federal Reserve raising rates in June, with the probability dropping to 61 per cent.”

China’s foreign exchange reserves rose US$10.26 billion to US$3.21 trillion in March, the first monthly gain since November, as cooling expectations of US interest rate increases eased pressure on the yuan.

In other currency trading, the euro weakened for a fourth day, easing 0.11 per cent to US$1.0756 while the British pound reversed its two-day loss to trade 0.05 per cent higher at 1.2378. The Japanese yen dropped for a third day, giving up 0.42 per cent to trade at 111.46 per dollar.