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Yuan holding at a 2-month high, set for the longest weekly winning streak since September

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SHANGHAI – The yuan remained at 2 months

high against the dollar’s decline on Friday, despite disappointing

data showing that growth in Chinese manufacturing activity slowed more

than expected in April.

The coin looked poised for its fourth consecutive weekly gain,

longest winning streak since September.

Before the market opening, the People’s Bank of China

(PBOC) set the midpoint rate at 6.4672 per dollar, 43

nuggets firmer than previous solution of 6.4715 and stronger

from March 3.

In the spot market, the onshore yuan opened at 6.4690

per dollar and changed hands at 6.4685 at noon, 35 pips

firmer than the close of the last previous session.

If the yuan ends the night session at noon

level, it would have posted its fourth consecutive weekly profit and

the first monthly increase in three.

Traders said trade was lukewarm ahead of the long Labor Day

holidays, with many market participants already out for the

vacations, while most investors refrained from having large

positions for the five-day break to avoid volatility in

markets.

China’s financial markets will be closed from Saturday and

trading will resume on May 6.

The yuan on the ground swung in a narrow range of around 60 pips, and

volume dropped to $ 12.58 billion at noon,

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from a normal mid-day volume of around $ 15 billion.

Several traders said the yuan was benefiting from a weakening

dollar, which skidded toward a fourth consecutive weekly decline

against a basket of major pairs, as the Federal Reserve remained

your ultra-low interest rate message for longer.

But the slight gain of the yuan on Friday morning was limited

by weaker-than-expected April manufacturing data.

“In contrast to the optimistic expected second quarter US data,

Repricing the Sino-US Growth Outlook for This Year

keep the RMB rally in check, “said Ken Cheung, Head of FX Asia

strategist at Mizuho Bank in Hong Kong.

China’s manufacturing activity expanded at a slower pace and

missed forecasts as supply bottlenecks and rising costs weighed

production and foreign demand lost momentum.

Separately, signs of tension in the onshore interbank market

It also provided support for the yuan, with several key currency rates.

rising to highs of more than two months due to month-end surge

demand for cash.

The volume-weighted average rate of the benchmark overnight.

the repos traded in the interbank market reached 2.2909% in

Friday morning, the highest level since February 18, while

weighted average for the seven-day period also rises to

the highest level since February 9.

At noon, the global dollar index rose to 90,647

from the previous close of 90.62, while the offshore yuan

It was trading at 6,464 to the dollar.

The yuan market at 0400 GMT:

PLACE ON LAND:

Item Current Previous Change

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PBOC midpoint 6.4672 6.4715 0.07%

Yuan cash 6,4685 6,472 0.05%

0.02% divergence

middle point *

Cash change to date 0.92%

Spot change since 2005 27.95%

revaluation

Key indices:

Item Current Previous Change

Thomson 96.83 96.8 0.0

Reuters / HKEX

CNH Index

Dollar index 90.647 90.62 0.0

* Divergence of the dollar / yuan exchange rate. Negative number

indicates that the spot yuan is trading stronger than the midpoint.

The People’s Bank of China (PBOC) allows the exchange rate

raise or lower 2% of the official midpoint rate established by each

Tomorrow.

CNH OFFSHORE MARKET

Instrument current difference

from land

Yuan cash offshore 6,464 0.07%

*

Offshore 6,637 -2.56%

not deliverable

forward

**

* Premium for offshore spot over onshore

** The figure reflects the difference from the official PBOC midpoint,

as undeliverable forwards are settled against the midpoint.

.

(Reporting by Winni Zhou and Andrew Galbraith; Editing by Kim

Coghill)

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