Vs Parity Pvs
USD/CNY Central Parity 6.3207 6.3247
USD/CNY OTC 0830 GMT 6.3402 +0.31% 6.3462
High 6.3462 +0.40%
Low 6.3365 +0.25%
China's yuan rose against the U.S. dollar late Wednesday in tandem with the central bank's guidance via its daily reference rate against the greenback, although gains were limited as the latest data showed inflationary pressure continued to ease in October.
On the over-the-counter market, the dollar was at CNY6.3402 around 0830 GMT, down from Tuesday's close of CNY6.3462. It traded between CNY6.3365 and CNY6.3462.
The yuan has risen 3.9% against the U.S. unit so far this year and 7.7% since June 2010, when China ended its currency's peg to the greenback.
The People's Bank of China set the dollar-yuan central parity rate at 6.3207, down from Tuesday's 6.3247, following the dollar's weakness overseas. The ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 76.632 late Tuesday in New York, down from 76.939 late Monday. Around 0830 GMT, the dollar index was at 76.789.
"The CPI figure signals that pressure for the yuan to appreciate will come off," says a Shanghai-based local bank trader. "There's been more stability in the spot market with more cautious trading."
China's inflation slowed significantly in October, which may open the door for policy makers to further loosen policy to support growth.
The country's consumer price index, a key gauge of inflation, rose 5.5% last month from a year earlier, down from 6.1% in September, the National Bureau of Statistics said.
Some traders said that arbitrage trade was muted after the Hong Kong Monetary Authority said late Tuesday it has tightened its monitoring of yuan-denominated cross-border trade settlement by asking banks to review and submit major transactions.
"The dollar-yuan pair is impacted by HKMA's announcement on stepping up its monitoring of cross-border trades settled in yuan, and arbitrage is drying up as a result. The spot market is likely to return to normal trading activity compared to last week, when the yuan rose to its daily limit for two consecutive sessions," said a Beijing-based local bank trader.
Offshore, one-year dollar-yuan nondeliverable forwards fell to 6.3080/6.3170 from 6.3340/6.3390 late Tuesday, and implying a 0.5% rise by the yuan against the U.S. currency over the next year.
In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar-yuan exchange rate was at 6.3480 late Wednesday, down from 6.3655 late Tuesday, tracking broad dollar weakness amid improved risk appetite.
Source:chinesestock