WSJ:China Yuan Up Late on PBOC Guidance; Tracking Dollar Weakness
Vs Parity Previous
USD/CNY Central Parity 6.2804 6.2821
USD/CNY OTC 0830 GMT 6.2376 -0.68% 6.2443
High 6.2429 -0.60%
Low 6.2372 -0.69%
SHANGHAI--China's yuan rose against the U.S. dollar late Wednesday as the central bank guided the Chinese currency higher after the dollar weakened against the yen overnight.
On the over-the-counter market, the dollar was at CNY6.2376 around 0830 GMT, lower than Tuesday's close of CNY6.2443. It traded in a range of CNY6.2372 to CNY6.2429.
The People's Bank of China set the dollar/yuan central parity rate at 6.2804, lower than Tuesday's 6.2821, following dollar weakness overseas, as comments from a top Japanese official suggested that the first hints of dissent over the new government's drive for an aggressive monetary policy may be forming.
The dollar fell to Y93.59 late Tuesday in New York, from Y93.90 late Monday. At 0900 GMT, the dollar was at Y93.35.
Traders said the yuan may have limited room to rise in the near term given the yen's recent weakening trend because the Chinese central bank wouldn't want its own currency to strengthen while other Asian currencies follow the yen downward. A yuan that is relatively stronger than its Asian counterparts will make Chinese exports more expensive in dollar terms to buyers.
"But the central bank may gradually let the yuan rise as China faces more inflationary pressure than it did last year," said a Shanghai-based local bank trader.
The yuan has weakened 0.1% against the dollar since the start of 2013.
Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.3174/6.3211 from 6.3220/6.3270 late Tuesday, implying a 1.2% 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 CNY6.2365, lower than CNY6.2393 late Tuesday.
