SHANGHAI/SINGAPORE — Chinese Yuan
weakened to a near six-month low against the dollar on Wednesday,
and give up all the profits it made this year for a basket
currencies of trading partners amid new tensions in
Traders said the yuan was also pressured by strong demand
took dollars, but they did not detect any move by state banks
to slow down the rate of currency decline.
“The speed of the yuan’s devaluation may be more important now
than any specific level,” said a trader at a foreign bank.
On Tuesday, the Speaker of the United States House of Representatives
committee on China, said the US Department of Commerce should put
Trade restraints on Chinese memory chip maker Changxin Memory
Technologies (CXMT) after Beijing earlier this week banned
the sale of certain chips by Micron Technology Inc. based in the United States.
China’s Cyberspace Regulatory Restrictions Against
Micron is the latest in an ever-expanding trade dispute between
the world’s two largest economies.
Prior to market opening, the People’s Bank of China (PBOC)
midpoint at near six-month low of 7,0560
per dollar, 234 pips or 0.33% weaker than the previous fix of
Wednesday’s fix price is 6 pips higher than Reuters estimates
of 7.0566. Currency traders say official guidance is available in
match their expectations.
“The absence of pushback from policymakers through daily reporting
The yuan fix has created the impression that policymakers may be moving in the right direction
discuss allowing the market to play a larger role in price
discovery,” said Christopher Wong, FX strategist at OCBC Bank.
“To some extent, these seem to indicate a devaluation of the renminbi in the
an ‘orderly manner’ can also fall within the acceptable limits of
Midpoint fixation weakens, leading to trade weight
CFETS yuan basket index fell to 98.51, the lowest level
as of December 26, 2022, effectively wiping out annual returns.
In the spot market, the domestic yuan opened at
7,0650 per dollar and weakened to as low as 7,0693 at a time,
weakest since December 1, 2022. It was last traded at 7.0577 at
4 . advertising
midday, 26 pips softer than the previous closing closing price.
Separately, traders said traditional dividend payments
the season will start soon and put further pressure on the yuan, because of China
Foreign-listed companies generally have a higher demand for foreign exchange between
May and July for payments to their foreign shareholders.
The state economic daily said in a commentary on
Fourth, the yuan is unlikely to appreciate strongly
fluctuations such as China’s economic foundation, balance of payments
and foreign exchange reserves were generally stable.
By midday, the global dollar index drops to 103.465
from the previous close of 103,488, while the yuan went offshore
was trading at 7.0668 per dollar.
The RMB market at 04:00 GMT:
POINT ON BOARD:
Current Item Previous Change
midpoint of PBOC 7,056 7.0326 -0.33%
Yuan Spot 7.0577 7.0551 -0.04%
Spread from 0.02%
YTD Spot Change -2.23%
Score change since 2005 17.27%
Current Item Previous Change
Dollar Index 103.465 103.488 0.0
*Difference of the dollar/yuan exchange rate. Negative
indicates that the spot yuan is trading stronger than the midpoint.
People’s Bank of China (PBOC) allows exchange rate
2% increase or decrease from the official average rate it sets per
Instrument current difference
from the shore
Overseas spot yuan 7.0668 -0.13%
Offshore 6,876 2.62%
Unable to deliver
*Premium for points offshore vs onshore
**Pictures reflect differences from the official PBOC midpoint,
as non-deliverable maturities are settled on the midpoint.
(Reporting by Winni Zhou and Tom Westbrook; Editing by
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