SHANGHAI, Nov 6: China’s yuan was steady against the dollar on Wednesday as an abundance of dollar supply offset a slightly weaker central bank midpoint, traders said.
Spot yuan traded at 6.0955 per dollar near midday, up 0.02 percent from Tuesday’s close of 6.0968, after the PBOC fixed its midpoint at 6.1475, slightly weaker than Tuesday’s close of 6.1447.
The People’s Bank of China (PBOC) has set a slew of weaker midpoints recently, guiding the Chinese currency away from the string of all-time highs touched in mid-October. The dollar/yuan exchange rate is permitted to rise or fall by as much as 1 percent from the midpoint each day.
‘The market sees the PBOC’s intention not to let the yuan appreciate continuously,’ said a dealer at a Chinese commercial bank in Shanghai. ‘But the market is still supplied with lots of dollars, so the yuan has no potential to fall much either.’
Traders expect the yuan to trade narrowly — within about 100 pips around 6.1 per dollar — in the coming weeks, barring major market-moving news.
(agencies)
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