WSJ:China Yuan Steady Late; PBOC Guidance Offset by Dollar Offers
Vs Parity Previous
USD/CNY Central Parity 6.2758 6.2741
USD/CNY OTC 0830 GMT 6.2157 -0.96% 6.2158
High 6.2152 -0.97%
Low 6.2174 -0.93%
SHANGHAI--China's yuan was little changed against the U.S. dollar late on Tuesday as the central bank's efforts to guide it weaker were offset by investors' confidence in the Chinese currency on the onshore market.
On the over-the-counter market the dollar was at CNY6.2157 around 0830 GMT--steady from Monday's close of CNY6.2158. It traded in a range of CNY6.2152 to CNY6.2174.
The People's Bank of China set the dollar/yuan central parity rate at 6.2758, higher than Monday's 6.2741, probably on the dollar's recent strength.
However, dollar offers from domestic corporates weighed on the currency pair and capped its upside.
"You can see the pair can hardly rise more as there are limited dollar bids in the market," said a Guangdong-based trader adding that the market still expects the yuan to rise because of renewed strength in Chinese exports.
The yuan has risen 0.2% against the dollar since the start of 2013.
Traders said the yuan market remains in a very narrow range in spite of overseas volatilities caused by Cyprus's bank-deposit tax.
"China's currency market is still in National People's Congress mode and it may need some more time to find a direction with new information after the meeting," said a Shanghai-based trader with foreign bank. China's NPC, or the legislature, ended its annual meeting last week.
Offshore one-year dollar/yuan nondeliverable forward contracts rose to 6.3074/6.3108 from 6.3060/6.3080 late Monday implying a 1.5% 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 CNY6.2085--lower than CNY6.2105 late Monday.
