WSJ:China Yuan Down Late on Dollar Demand After Yuan's Recent Strength
Vs Parity Previous
USD/CNY Central Parity 6.3426 6.3410
USD/CNY OTC 0830 GMT 6.2872 -0.87% 6.2849
High 6.2876 -0.87%
Low 6.2812 -0.97%
SHANGHAI--China's yuan fell against the U.S. dollar late Monday, the first day of trading after a week-long holiday, as demand for the U.S. unit increased after the Chinese currency rose to its highest-ever level since Beijing depegged the Chinese currency in July 2005 before the holiday.
On the over-the-counter market, the dollar was at CNY6.2872 around 0830 GMT, higher than Sept. 28's close of CNY6.2849, the lowest closing level under the current system. It traded in a range of CNY6.2812 to CNY6.2876.
China's financial markets were closed last week due to the National Day holiday.
The People's Bank of China set the dollar/yuan central parity rate at 6.3426, also higher than Sept. 28's 6.3410, even though the euro rose to a two-week high against the dollar Friday.
"The dollar's level is quite low after its recent losses, so corporates who have demand for the dollar have started to buy," said a Shanghai-based trader with foreign bank.
The yuan has risen 0.1% against the dollar since the start of this year, erasing losses of as much as 1.6% in late July. It has appreciated 31.7% against the dollar since July 21, 2005.
Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.3910/6.3940 from 6.4047/6.4097 late Sept.20, implying a 1.6% 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 CNY6.2965 late Monday, lower than CNY6.3025 late Sept. 20.
