WSJ:China Yuan up on Weaker Dollar, Stronger Fixing
China's yuan rose slightly against the U.S. dollar late Wednesday because of the U.S. unit's overnight weakness and the Chinese central bank's effort to guide the local currency higher.
On the over-the-counter market, the dollar was at CNY6.3474 around 0830 GMT, lower than Tuesday's close of CNY6.3523. It traded in a range of CNY6.3404 to CNY6.3568.
The People's Bank of China set the dollar/yuan central parity rate at 6.3121, slightly down from Tuesday's 6.3178.
The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 81.786 late Tuesday in New York, lower than 81.897 late Monday. At 0830 GMT, the index was around 81.881.
"The (dollar/yuan) pair has been fairly stable this week as buy and sell flows are about even," said one trader with a local bank based in Beijing. "Yesterday, the market was in a risk off mode, with better-than-expected U.S. economic data helping oil prices and the euro higher. The dollar was relatively weak compared to the euro," he added.
Trading is expected to be quiet Thursday as U.S. markets are closed for the Independence Day holiday on Wednesday. Investors will likely be watching for U.S. non-farm payrolls data, a closely watched job market indicator, set to be released Friday.
The yuan has fallen 0.8% since the start of 2012.
Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.4000/6.4070 from 6.4050/6.4080 late Tuesday, implying a 0.8% 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 CNY6.3455 late Wednesday, lower than CNY6.3520 late Tuesday in Asia.
