Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

China's yuan set for longest weekly winning streak since 2021

Published 08/22/2024, 11:41 PM
Updated 08/22/2024, 11:52 PM
© Reuters. Chinese Yuan banknotes are seen in this illustration picture taken June 14, 2022. REUTERS/Florence Lo/Illustration/File Photo
USD/CNY
-
USD/CNH
-

SHANGHAI (Reuters) - China's yuan inched higher against a softer dollar on Friday and looked set for the fifth straight weekly gain, its longest winning streak in more than three years.

The yuan was supported by stronger corporate interest in converting their foreign exchange receipts on the back of recent dollar weakness, but gains were capped by market caution ahead of Federal Reserve Chair Jerome Powell's speech in Jackson Hole, Wyoming, later on Friday.

Powell' remarks are expected to offer more clues on the monetary policy trajectory in the world's largest economy and affect global financial markets, traders said.

By 0300 GMT, the yuan was trading 0.07% higher at 7.1428 to the dollar. If it retains all the gains into the late night close, it would have strengthened 0.23% against the dollar for the week, booking its longest weekly winning streak since May 2021.

"Yuan depreciation pressure has been alleviated as we have seen a general weakening of the dollar over the last month or two," said Lynn Song, chief economist for Greater China at ING.

"The main reason for this is on the external side, as market expectations for Fed rate cuts have grown, and if the Fed cuts rates at a relatively fast pace, yield spreads should move to favour continued recovery of the yuan."

Song expected policymakers to continue to keep currency stability as a high priority moving forward.

China's central bank has been setting its daily official yuan midpoint fixing at levels firmer than market projections for more than a year, with traders and analysts widely interpreting it as an official attempt to keep the currency stable and supported.

And the discrepancy between the official guidance and market projections have gradually narrowed over the past few weeks.

On Friday, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1358 per dollar, 122 pips firmer than a Reuters' estimate.

The offshore yuan traded at 7.1425 yuan per dollar, up about 0.06% in Asian trade.

LEVELS AT 0300 GMT:

INSTRUMENT CURRENT UP/DOWN(-) % CHANGE DAY'S HIGH DAY'S 

vs USD VS. PREVIOUS YR-TO-DATE LOW

CLOSE %

Spot yuan 7.1428  0.04 -0.57 7.1418 7.1478

© Reuters. Chinese Yuan banknotes are seen in this illustration picture taken June 14, 2022. REUTERS/Florence Lo/Illustration/File Photo

Offshore 7.1424  0.06 -0.24 7.1409 7.1486

yuan spot

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.