WSJ:China Yuan Down Late on Dollar Buying After Recent Sharp Gains
Vs Parity Previous
USD/CNY Central Parity 6.3402 6.3415
USD/CNY OTC 0830 GMT 6.3473 +0.11% 6.3407
High 6.3475 +0.12%
Low 6.3310 -0.15%
SHANGHAI--China's yuan fell sharply against the U.S. dollar late Tuesday as traders sold the yuan in favor of cheap U.S. dollars after the Chinese currency rose to a three-month high late Monday.
On the over-the-counter market, the dollar was at CNY6.3473 around 0830 GMT, higher than Monday's close of CNY6.3407. It traded in a range of CNY6.3310 to CNY6.3475.
The dollar fell in the morning after the People's Bank of China set the dollar/yuan central parity rate lower at 6.3402, anticipating in part U.S. Secretary of State Hillary Clinton's visit in China Tuesday. The fixing was set at 6.3415 Monday.
However, dollar buying set in heavily in the afternoon and turned the market around.
"It's not a surprise to see such flows as the yuan has been steadily rising for a while," said a Guangdong-based trader with a foreign bank.
The yuan is now down 0.8% this year against the dollar, after being down by as much as 1.6% against the dollar in late July.
"The yuan's recovery hasn't ended and I expect it to rise further after the [dollar buying] flows pass," said a Shanghai-based trader with foreign bank.
Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.4353/6.4378 from 6.4455/6.4485 late Monday, implying a 1.4% 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 CNY6.3450, lower than CNY6.3460 late Monday.
