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China's yuan opens slightly weaker, shrugs off central bank's stronger midpoint

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The yuan opened slightly weaker against the US dollar on Wednesday as corporate dollar demand remained strong, offsetting a stronger official guidance rate set by the central bank, traders said.

[SHANGHAI] The yuan opened slightly weaker against the US dollar on Wednesday as corporate dollar demand remained strong, offsetting a stronger official guidance rate set by the central bank, traders said.

The Chinese currency opened at 6.4642 per US dollar versus last close at 6.4581. It moved narrowly around the opening in early trade.

As China's economy slows, damping investment opportunities at home, Chinese companies have rushed to buy overseas assets this year and that has increased their dollar demand in the domestic market, traders said.

The People's Bank of China set the midpoint rate at a four-month high of 6.4579 per US dollar prior to the market's open, 0.2 per cent firmer than the previous fix at 6.4700, reflecting the US dollar's weakening in global markets overnight.

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The US dollar index hit 10-month lows against some commodity currencies on Tuesday on a growing appetite for risky assets and lost further ground to the euro after weak US economic data reinforced views that Federal Reserve monetary policy would remain dovish.

REUTERS

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