WSJ:China Yuan up Late as Companies, Banks Cut Dollar Positions
Vs Parity Previous
USD/CNY Central Parity 6.3430 6.3411
USD/CNY OTC 0830 GMT 6.3066 -0.57% 6.3093
High 6.3113 -0.50%
Low 6.3019 -0.65%
SHANGHAI--China's yuan was higher against the U.S. dollar late Tuesday as companies and banks continued to cut dollar positions ahead of the weeklong national day holiday next week, despite the central bank's guiding the Chinese currency lower via a daily reference rate.
On the over-the-counter market, the dollar was at 6.3066 yuan around 0830 GMT, down from Monday's close of CNY6.3093. It traded in a CNY6.3019-CNY6.3113 range.
"Companies and banks accumulated too many dollars when the yuan was depreciating earlier this year, so we are seeing heavy dollar selling flows as they cut their positions," said a Shanghai-based trader with a local bank.
The yuan declined by as much as 1.6% against the dollar between the start of the year and late July. It has since recovered and is now down about 0.2% since the start of the year.
The People's Bank of China set the dollar/yuan central parity rate at 6.3430, up from Monday's 6.3411, after the dollar strengthened overseas as the euro was hit by the disappointing results of a German business confidence survey and uncertainty over whether Spain will seek a bailout.
Offshore, one-year dollar/yuan nondeliverable forward contracts rose to 6.4170/6.4220 from 6.4130/6.4160 late Monday, implying a 1.7% 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 CNY6.3115, lower than CNY6.3120 late Monday.
