WSJ:China Yuan up Late on Dollar Sales; Typhoon Thins Trade
Vs Parity Previous
USD/CNY Central Parity 6.3378 6.3332
USD/CNY OTC 0830 GMT 6.3615 +0.37% 6.3664
High 6.3688 +0.49%
Low 6.3585 +0.33%
SHANGHAI--China's yuan was higher against the U.S. dollar late Wednesday as big banks sold the dollar in the afternoon, despite the central bank's efforts to guide the local currency weaker via the daily reference rate.
On the over-the-counter market, the dollar was at CNY6.3615 around 0830 GMT, lower than Tuesday's close of CNY6.3664. It traded in a range of CNY6.3585 to CNY6.3688.
The People's Bank of China set the dollar/yuan central parity rate at 6.3378, higher than Tuesday's 6.3332, following dollar strength against the yen overnight.
There was thin trading due to a massive typhoon that hit the financial center in Shanghai with heavy rain and strong winds, diverting traders' interests.
Shanghai's government raised its typhoon warning shortly before midday Wednesday to the highest level of red, effectively recommending a shutdown to most business and port activity in the giant coastal Chinese city.
However, all the banks were still functioning throughout the day. Trading rooms of most foreign banks and several major Chinese banks are located in Shanghai.
Big banks sold a large amount of dollars shortly before the market was about to close, following weak demand from oil companies.
Traders also said they were waiting for July's macroeconomic data, due Thursday morning. China's consumer inflation in July likely slowed further to its lowest level since January 2010, which could offer more room for Beijing to continue easing its monetary policy to boost growth, economists say.
The yuan has fallen 1.1% since the start of 2012.
Offshore, one-year dollar/yuan nondeliverable forward contracts rose 6.4253/6.4293 from 6.4235/6.4265 late Tuesday, implying a 1.0% 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 CNY6.3725, lower than CNY6.3745 late Tuesday.
