WSJ:China Yuan Up Late to Record High on Strong Dollar Selling
Vs Parity Previous
USD/CNY Central Parity 6.3449 6.3441
USD/CNY OTC 0830 GMT 6.2833 -0.97% 6.2878
High 6.2899 -0.87%
Low 6.2832 -0.97%
SHANGHAI--China's yuan rose against the U.S. dollar late Wednesday to its highest level since Beijing depegged the Chinese currency in July 2005, as investors continued to cut their dollar positions even though the central bank guided the yuan lower via a daily reference rate.
On the over-the-counter market, the dollar was at CNY6.2833 around 0830 GMT, the lowest closing level under the current system and down from Tuesday's close of CNY6.2878. It traded in a range of CNY6.2832 to CNY6.2899.
The yuan has resumed its trend of appreciation against the dollar in the past few weeks, reversing losses incurred earlier in the year. Investors who were pessimistic about the yuan earlier this year are cutting losses on previously bullish bets on the dollar, especially after the U.S. Federal Reserve launched a new bond-buying program.
"There are too many dollars in the system and the trend may continue once it has started," said a Shanghai-based trader with foreign bank. He added the yuan may rise further on Thursday.
The yuan has risen 0.2% against the dollar since the start of this year, erasing losses of as much as 1.6% in late July. It has appreciated 31.8% against the dollar since July 21, 2005.
The People's Bank of China set the dollar/yuan central parity rate at 6.3449, tad higher than Tuesday's 6.3441, tracking dollar strength overseas.
Offshore, one-year dollar/yuan nondeliverable forward contracts rose to 6.3944/6.3989 from 6.3910/6.3940 late Tuesday, 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 CNY6.2920, higher than CNY6.2900 late Tuesday.
