China's yuan fell against the U.S. dollar late Monday as the central bank set a firm reference rate for the greenback after the release of strong U.S. jobs data over the weekend.

The yuan also weakened in tandem with the euro which fell below the key support level of $1.31 in Asian morning trade over concerns that debt-ridden Greece would not accept conditions required for it to secure fresh aid from the International Monetary Fund and the other euro-zone partners.

On the over-the-counter market, the dollar was at CNY6.3121 around 0830 GMT, up from Friday's close of CNY6.3028. It traded in a range of CNY6.3067 to CNY6.3146.

The People's Bank of China set the dollar-yuan central parity rate at 6.3108, up from Friday's 6.3102.
Demand for the dollar rose amid euro weakness during the Asian session. The latter hovered around the $1.3066 level at around 0830 GMT.

"We are waiting for more cues from Greek politicians over the introduction of economic reforms which are needed before Greece can receive its second bailout package. This will decide whether the euro will fall further," said a Shanghai-based local bank trader.

In its China Economic Outlook report released Monday, the IMF said upward pressure on the Chinese yuan has diminished recently as the speed of foreign reserve accumulation has declined due to China's smaller trade surplus and higher global risk aversion.

The yuan has risen 8.1% against the U.S. unit since June 2010, when China effectively ended its currency's two-year-long peg to the dollar and vowed to make the yuan more flexible.

Offshore, one-year dollar-yuan nondeliverable forward contracts rose to 6.2740/6.2790 from 6.2730/6.2760 late Friday, implying a 0.6% rise by the yuan against the dollar over the next year.

In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar was at CNY6.2985 late Monday, up from CNY6.2948 late Friday.

Source:chinesestock