Vs Parity Previous
USD/CNY Central Parity 6.2858 6.2721
USD/CNY OTC 0830 GMT 6.3079 +0.35% 6.3062
High 6.3150 +0.46%
Low 6.3073 +0.34%
SHANGHAI (Dow Jones)--China's yuan fell against the U.S. dollar late Monday, after the central bank guided the currency to stay at a relatively weaker level via a reference exchange rate and as it took cues from the euro's weakness abroad.
On the over-the-counter market, the dollar was at CNY6.3079 around 0830 GMT, higher than Friday's close of CNY6.3062. It traded in a range of CNY6.3073 to CNY6.3150.
The People's Bank of China set the dollar/yuan central parity rate at 6.2858, higher than Friday's 6.2721 following dollar strength overseas. The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 79.505 late Friday in New York, higher than 79.221 late Thursday. At 0843 GMT, the index was at 79.813.
The yuan has fallen 0.2% since the start of 2012.
"Right now, apart from the central parity, the pair is taking cues from the euro's decline and the uncertainties in the euro zone," said a Guangzhou-based trader at a foreign bank. "Market demand and supply dynamics are pretty steady as well."
The euro was broadly weaker after Greek voters rejected the austerity policies of the incumbent government and as Francois Hollande ousted Nicolas Sarkozy to become France's first Socialist president in nearly two decades. Analysts said the results cloud the outlook for a solution to the European debt crisis and they expect the political upheaval to keep the euro weak in the near term.
Meanwhile, People's Bank of China Vice Gov. Yi Gang told Century Weekly in an interview published Monday the yuan exchange rate is "close to a balanced level" and "isn't clearly undervalued."
His comments come after the close of the annual U.S.-China Strategic and Economic Dialogue Friday. The PBOC guided the yuan to a much stronger level via the central parity in a few sessions last week and the week before amid political pressure to allow the currency to appreciate during such high level meetings, but trading was still rangebound.
Offshore, one-year dollar/yuan nondeliverable forward contracts rose to 6.3520/6.3550 from 6.3440/6.3480 late Friday, implying a 0.7% fall by the yuan over the next year.
In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar was at CNY6.3100 late Monday, higher than CNY6.3055 late Friday.
-By Esther Fung, Dow Jones Newswires; 86-21-6120-1200; esther.fung@dowjones.com
