Vs Parity Pvs
USD/CNY Central Parity 6.3334 6.3349
USD/CNY OTC 0830 GMT 6.3642 +0.49% 6.3641
High 6.3651 +0.50%
Low 6.3631 +0.47%
China's yuan was steady against the U.S. dollar late Tuesday, with the central bank using its reference rate to maintain short-term stability in the currency, which hit the lower limit of its trading band for a fifth straight session.
The dollar was at CNY6.3642 on the over-the-counter market around 0830 GMT, nearly unchanged from CNY6.3641 late Monday. It traded in a narrow range of CNY6.3631 to CNY6.3651.
Ahead of trading, the People's Bank of China fixed the dollar-yuan central parity rate at 6.3334, down slightly from 6.3349 Monday.
Traders noted the central bank had set the rate near 6.33 for the past several sessions, perhaps indicating it seeks a stable yuan in the short term amid capital outflows.
The yuan fell to the low end of its daily trading band against the dollar for the fifth consecutive session in early trade Tuesday as investors continued to seek the perceived safety of the dollar.
"The main theme for the spot market is still capital flowing out of China, pushing the dollar to the upside limit each day. Meanwhile, the PBOC will likely continue to set the daily fixing according to moves in the global currency market. There's little chance of more intentional appreciation to end the year," a Shenzhen-based trader at a foreign bank said.
Dealers said they don't expect Beijing to allow a wider trading band in the near term because authorities need more time and economic data to assess the health of the economy.
"If the PBOC can set the fixing around 6.3500, the yuan wouldn't be hitting its downside limit every day," a Shanghai-based trader at a local bank said.
The PBOC allows the yuan to float as much as 0.5% above and below its daily reference rate against the dollar, the narrowest band among pairs traded onshore.
The yuan is up 3.5% against the dollar this year and 7.3% since June 2010, when China ended its currency's peg to the dollar.
Offshore, one-year dollar-yuan nondeliverable forward contracts rose to 6.3895/6.3935 from 6.3840/6.3870 late Monday, implying a 0.4% decline in the yuan against the dollar over the next year.
In Hong Kong, where the yuan floats freely, the dollar-yuan exchange rate was CNY6.3825 late Tuesday, down from CNY6.3840 late Monday.
Source:chinesestock