SHANGHAI, Sept 3: China’s yuan edged lower against the dollar on Tuesday after the central bank set a slightly weaker midpoint to reflect a dollar rally in global markets, traders said.
But the domestic market continued seeing an abundant dollar supply, with corporates selling them for now, indicating the Chinese currency may still have some potential to rise slightly in coming days, they said.
Spot yuan changed hands at 6.1205 per dollar at midday, down 0.01 percent from the previous close, after the People’s Bank of China (PBOC) set its midpoint at 6.1718, or 0.03 percent weaker than Monday’s 6.1702.
The yuan could rise to 6.11 against the dollar this week or early next week before falling back slightly, traders said.
It was likely to remain largely stable in the medium term, moving in a narrow range between 6.11 and 6.13, with good dollar supply offset by pressure from depreciation of other Asian currencies, they said.
The yuan has gained 1.79 percent far this year, bucking the weakening trend of emerging market currencies. However, the bulk of the yuan’s gains were in April and May.
(AGENCIES)
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