Yuan passes 6.6 level last seen in Jun 2016

Source:Reuters-Global Times Published: 2017/8/29 17:38:39

China's yuan strengthened against the US dollar in both onshore and offshore markets on Tuesday, aided by the greenback's broad weakness.

The onshore yuan has gained 1.8 percent against the dollar in August, and is on course for its best month since July 2005 when the yuan was revalued and taken off a fixed dollar peg.

Some market watchers said much of the yuan's gain since the start of the second quarter is due to the weaker dollar and to China's tighter capital controls.

Prior to market opening on Tuesday, the People's Bank of China set its midpoint rate at 6.6293 per dollar, again the strongest since August 19, 2016. The level was 60 pips or 0.1 percent firmer than the previous fix.

In the spot market, the onshore yuan opened at 6.6240 per dollar and was changing hands at 6.5943 during the afternoon trading, 0.21 percent stronger than the previous session.

The offshore counterpart also strengthened and was traded around 6.5990 per dollar.

As expected by traders, both the offshore and onshore yuan strengthened past the psychologically important 6.6 per dollar level on Tuesday for the first time since June 2016.

"6.6 is the next resistance for the market," said a trader at a Chinese bank in Shanghai.

Companies who hold large amounts of dollars were seeking to liquidate positions to reduce exchange losses. And such dollar sales would give the yuan additional support.

Some market participants said the risk of further declines in the US currency still remained.

Posted in: MARKETS

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