China’s yuan firms after strong export data

0
11

Article content

SHANGHAI — China’s yuan firmed against the

dollar on Tuesday, after data showed the country’s exports

growth unexpectedly accelerated in August.

The People’s Bank of China set the midpoint rate

at 6.4533 per dollar prior to market open, 4 pips weaker than

the previous fix of 6.4529.

In the spot market, the yuan opened at 6.4553 per

dollar and was changing hands at 6.4548 at midday, 32 pips

firmer from the previous late session close.

China’s exports unexpectedly grew at a faster pace in

Advertisement

Article content

August, as solid global demand offset some of the pressure on

the world’s second-biggest economy from a resurgence of domestic

COVID-19 cases and supply bottlenecks.

“The robust China exports figure should help alleviate

concern over a slowdown for China’s economy and excessive RMB

basket strength,” Ken Cheung, chief Asian FX strategist at

Mizuho Bank in Hong Kong, said in a note.

“The PBoC should be less tempted to allow more RMB

depreciation to support export growth and will be less urgent to

bring forward its required reserves ratio (RRR) cut to this

month.”

Official data on Monday also showed global investors raised

their holdings of Chinese government bonds (CGBs) to a record

high for a fifth straight month in August.

Advertisement

Article content

China’s securities regulator officials said they would

further deregulate and open capital markets to foreign

investors.

While the dollar has recovered from a selloff after last

week’s disappointing U.S. jobs data, prevailing uncertainties

about the economy mean the Federal Reserve is in no hurry to

raise rates, said Maybank in a note.

“A case of Fed taper delay supports sentiment and could

weigh on USD in the interim, assuming no unexpected resurgence

in COVID infection,” Maybank said.

The global dollar index fell to 92.154 from the

previous close of 92.192. The offshore yuan was trading

at 6.4496 per dollar.

The yuan market at 0427 GMT:

ONSHORE SPOT:

Item Current Previous Change

PBOC midpoint 6.4533 6.4529 -0.01%

Advertisement

Article content

Spot yuan 6.4548 6.458 0.05%

Divergence from 0.02%

midpoint*

Spot change YTD 1.14%

Spot change since 2005 28.22%

revaluation

Key indexes:

Item Current Previous Change

Thomson 98.49 98.56 -0.1

Reuters/HKEX

CNH index

Dollar index 92.154 92.192 0.0

*Divergence of the dollar/yuan exchange rate. Negative number

indicates that spot yuan is trading stronger than the midpoint.

The People’s Bank of China (PBOC) allows the exchange rate to

rise or fall 2% from official midpoint rate it sets each

morning.

OFFSHORE CNH MARKET

Instrument Current Difference

from onshore

Offshore spot yuan 6.4496 0.08%

*

Offshore 6.6251 -2.59%

non-deliverable

forwards

**

*Premium for offshore spot over onshore

**Figure reflects difference from PBOC’s official midpoint,

since non-deliverable forwards are settled against the midpoint.

.

(Reporting by Shanghai Newsroom; Editing by Sam Holmes)

Advertisement

In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post.

    Comments

    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.