China's yuan firms vs dollar, focus on Yellen's Jackson Hole speech

[SHANGHAI] China's yuan firmed on Thursday, underpinned by a modest pullback in the dollar index in Asian morning trade though activity remained subdued.

Trading was cautious ahead of the global central bankers' gathering in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen's speech on Friday may offer fresh clues on US monetary policy outlook.

"Signals on US monetary policy trend appear quite mixed of late," said a trader at a European bank in Shanghai.

"So (Chinese) banks choose to take a wait-and-see attitude, not to quote yuan/dollar rates aggressively. As such, the yuan's movements this morning were quite insignificant."

The People's Bank of China set the midpoint rate at 6.6602 per US dollar prior to market open, weaker than the previous fix at 6.642, reflecting the US dollar's overnight strength.

The spot market opened at 6.6578 per US dollar and was changing hands at 6.6565 at midday, 45 pips firmer than the previous close as dollar strength faded in Thursday's Asian trade, traders said.

The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.65, weaker than the previous day's 94.71.

The offshore yuan was trading 0.21 per cent weaker than the onshore spot at 6.6702 per US dollar.

REUTERS