WSJ:China Yuan Down Late On Heavy Dollar Buying, Bucks Central Bank Guidance
Vs Parity Previous
USD/CNY Central Parity 6.2787 6.2829
USD/CNY OTC 0830 GMT 6.3102 +0.50% 6.3060
High 6.3124 +0.54%
Low 6.3025 +0.38%
SHANGHAI (Dow Jones)--China's yuan fell against the U.S. dollar late Friday on heavy dollar buying, even though the central bank set the yuan's daily reference rate against the U.S. dollar at a record high for the second straight day.
On the over-the-counter market, the dollar was at CNY6.3102 around 0830 GMT, higher than Thursday's close of CNY6.3060. It traded in a range of CNY6.3025 to CNY6.3124.
"The market had accumulated lots of short-dollar positions before and those investors came out to stop losses," said a Shanghai-based foreign bank trader.
Traders said the day's trade continued a trend in recent days of ignoring the central bank's guidance, and that the pair may continue to stay in the current range no matter where the central parity goes.
The People's Bank of China set the dollar/yuan central parity rate at 6.2787 Friday, the lowest level since China depegged its currency from the dollar in 2005 and down from Thursday's 6.2829.
The record yuan fixing came after U.S. Treasury Secretary Timothy Geithner said Thursday China hasn't gone far enough in its efforts to open its economy or allow its currency to appreciate, outlining key U.S. concerns ahead of a summit with the Asian nation.
"The central bank is playing the political card...The central parity may continue to fall until the China-U.S. dialogue starts," said a Shanghai-based foreign bank trader.
The yuan has fallen 0.3% since the start of 2012.
Offshore, the yuan followed the onshore market. One-year dollar/yuan nondeliverable forward contracts rose to 6.3510/6.3540 from 6.3445/6.3475 late Thursday, implying a 0.7% 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 CNY6.3110 late Friday, up from CNY6.3045 late Thursday.
-Wynne Wang and Andrew Galbraith contributed to this article, Dow Jones Newswires; (86-21) 6120-1200; wynne.wang@dowjones.com
