Vs Parity Pvs
USD/CNY Central Parity 6.3968 6.3946
USD/CNY OTC 0830 GMT 6.3940 -0.04% 6.3908
High 6.3973 +0.01%
Low 6.3908 -0.09%

China's yuan fell against the U.S. dollar for a fifth straight session late Wednesday after the central bank set a higher dollar/yuan reference exchange rate on the back of a stronger dollar.

On the over-the-counter market, the dollar was at CNY6.3940 around 0830 GMT, up from CNY6.3908 late Tuesday. It traded between CNY6.3908 and CNY6.3973.

The People's Bank of China fixed the dollar/yuan central parity rate at 6.3968, up from Tuesday's 6.3946, after Switzerland moved aggressively late Tuesday to weaken its soaring currency by capping the franc's rise against the euro. This sent market participants in search of alternative safe-haven currencies and boosted the dollar.

However, dealers said the uptick in Wednesday's fixing was relatively small, signalling that the PBOC is unwilling to let its currency weaken by much.

"The PBOC allowed the fixing to rise only around 20 pips...dealers are cautious about pushing the pair up further," said a trader at a local bank in Beijing. He added that if the dollar continues to strengthen this week, the expectations of some market participants that the PBOC will let the yuan rise when China releases its inflation and trade data may be diluted. The monthly economic data is due Friday and Saturday, respectively.

The yuan has risen 3.1% against the U.S. unit this year, and 6.8% since June 2010, when China ended its currency's peg to the dollar.

Offshore, the yuan fell against the dollar in both the nondeliverable forwards and spot markets, tracking the onshore market. One-year dollar-yuan nondeliverable forwards rose to 6.2885/6.2925 from 6.2850/6.2900 late Tuesday, implying a 1.7% 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 6.3620 late Wednesday, up from 6.3595 late Tuesday.

Source:Source: Dow Jones