You are here
China's yuan slips to one-week lows on dollar bounce
[HONG KONG] China's currency fell to one-week lows on Monday as the dollar gained against regional currencies in a relief rally after news that Democrat Hillary Clinton would not face criminal charges related to her use of a private e-mail server.
The news lifted a cloud over Clinton's presidential campaign two days before the US election.
"The yuan's fixing has declined since last Friday broadly in line with the dollar's bounce against other currencies," said Qi Gao, an FX strategist at Scotiabank based in Singapore.
"Capital outflows remain a concern but we think the authorities will manage the pace of the yuan depreciation in an orderly manner," he said.
The People's Bank of China set the midpoint rate at 6.7725 per dollar prior to the market open, weaker than the previous fix of 6.7514.
In the spot market, the yuan opened at 6.7695 per dollar and was changing hands at 6.7748 at midday, 208 pips away from the previous late session 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 94.55, flat with the previous day's 94.55.
The global dollar index rose to 97.462 from the previous close of 97.065.
The offshore yuan was trading 0.15 per cent away from the onshore spot at 6.7847 per dollar.
Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.936, -2.36 per cent away from the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate.