Vs Parity Previous USD/CNY Central Parity 6.3236 6.3260 USD/CNY OTC 0830 GMT 6.3450 +0.34% 6.3439 High 6.3457 +0.35% Low 6.3408 +0.27%
SHANGHAI (Dow Jones)--China's yuan was lower against the U.S. dollar late Monday on strong dollar buying by companies, retreating from earlier gains that were driven by a higher yuan fixing and expectations of domestic stimulus.
On the over-the-counter market, the dollar was at CNY6.3450 around 0830 GMT, higher than Friday's close of CNY6.3439. It traded in a range of CNY6.3408 to CNY6.3457.
The yuan was higher against the dollar over most of the trading session as China's central bank set a stronger yuan fixing after Greece opinion polls showed Sunday that the country's pro-austerity conservatives in the lead for the June election. The People's Bank of China set the dollar/yuan central parity rate at 6.3236, compared with Friday's 6.3260.
Expectations that China will roll out more stimulus policies to arrest the slowdown in domestic growth also supported the yuan. Credit Suisse said in a research report that it believes the government has started a new round of fiscal stimulus, and it sees the possibility of a 25 bps cut in the policy lending rate, without a cut in the deposit rate, and a rebound in bank loans in June and July.
However, dollar buying set in when the market was about to close and traders cited corporate demand as the main reason. "According to my experience, it's the oil companies again," said a Shanghai-based foreign bank trader.
The yuan has fallen 0.8% since the start of 2012.
Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.4050/6.4090 from 6.4090/6.4140 late Friday, implying a 0.9% 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 CNY6.3410 late Monday, lower than CNY6.3478 late Friday.
-Wynne Wang contributed to this article, Dow Jones Newswires; (86-21) 6120-1200; wynne.wang@dowjones.com
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