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WSJ:China Yuan Stays In Tight Range; Ignores Stronger Dollar
 

Vs Parity Previous
USD/CNY Central Parity 6.1352 6.1329
USD/CNY OTC 0830 GMT 6.0924 -0.70% 6.0929
High 6.0933 -0.68%
Low 6.0918 -0.71%

SHANGHAI--China's yuan ended little moved against the U.S. dollar Tuesday though the central bank guided the Chinese currency weaker following a stronger dollar overnight, as traders showed limited trading interest after the yuan was kept in a tight range for more than a month.

On the over-the-counter market, the dollar was at CNY6.0924 around 0830 GMT, lower than Monday's close of CNY6.0929. It traded in a tight range of CNY6.0918 to CNY6.0933.

The People's Bank of China set the dollar/yuan central parity rate at 6.1352, higher than Monday's 6.1329, after the dollar hit fresh six-month highs against the yen and rose against most other major currencies Monday on unexpectedly strong U.S. manufacturing numbers.

"It's difficult to forecast when the yuan will break the current range as we don't know when the central bank will stop buying the dollar," said a Shanghai-based trader with foreign bank.

Traders said the central bank has been heavily buying dollars in recent months to prevent the yuan from strengthening too fast.

The yuan has risen 2.3% since the start of 2013. It only gained 1% in the last year.

Offshore, one-year dollar/yuan nondeliverable forward contracts rose to 6.1528/6.1571 from 6.1505/6.1535 late Monday, implying a 1.0% 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 CNY6.0865 late Tuesday, higher than CNY6.0847 late Monday.
Source