Reuters
Published Aug 31, 2015 12:09AM ET
China's yuan up on suspected intervention, set for August loss
SHANGHAI, (Reuters) - China's yuan firmed on Monday after the central bank set a stronger guidance rate while it also appeared to continue using state-owned banks to support the Chinese currency, traders said.
For August, the currency is set to depreciate 2.7 percent if it closes at the midday level. Most of the losses came after the People's Bank of China (PBOC) surprised markets by devaluing the yuan by nearly 2 percent on Aug. 11.
"Major state-owned banks bought a large amount of yuan this morning," said a trader at an Asian bank in Shanghai.
These banks were suspected of intervening on behalf of the central bank around 6.38 against the dollar, several traders said.
The PBOC set the midpoint rate
The spot market
After the abrupt devaluation on Aug. 11, Beijing appears to have been so surprised by the global reaction that it tends to keep the yuan on a tight leash to head off a currency war that could spark a broader financial crisis, policy insiders say.
Premier Li Keqiang reiterated at the weekend earlier remarks that there's no basis for continued depreciation of the yuan following its devaluation.
The yuan "will stay basically stable as a reasonable and balanced level," he said. Most market watchers, however, believe there is political pressure for it to weaken further to support exports and reflecting expectations of further policy easing.
The offshore yuan CNH=D3 was trading 1.03 percent weaker than the onshore spot at 6.4469 per dollar by midday.
Offshore one-year non-deliverable forwards contracts
Written By: Reuters
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.