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China's yuan weakens in cautious mood ahead of G20, US jobs data
[SHANGHAI] China's yuan weakened on Thursday morning, with investors cautious ahead of the upcoming G20 summit and US labour figures that may put the Federal Reserve on course to raise rates as early as this month.
Traders expect spot yuan to fluctuate in a narrow range as world leaders of the Group of 20 nations gather in the eastern city of Hangzhou this weekend. Markets speculate that Chinese policymakers will want to keep the currency stable at this time.
"The market is waiting for the outcome from the G20, and no one knows what may yield from the meetings," said a trader at a European bank in Shanghai.
"And investors are waiting for the US non-farm payrolls data," he added, indicating the US Labor Department's employment report on Friday could change investors' bets over the timeline and trajectory of US interest rate increases.
The People's Bank of China set the daily midpoint at 6.6784 per US dollar prior to the market open, firmer than the previous fix of 6.6908.
The spot market opened at 6.6795 per US dollar and was changing hands at 6.6804 at midday, 14 pips weaker than the previous close and 0.03 per cent away from the midpoint.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.14, flat with the previous day's 95.14.
The global dollar index fell to 95.978 from the previous close of 96.022.
The offshore yuan was trading 0.14 per cent weaker than the onshore spot at 6.69 per US dollar.