Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Yuan closes domestic session at over 2-year high on PBOC guidance, upbeat data

10/21/2020 | 04:56am EST

SHANGHAI, Oct 21 (Reuters) - The yuan advanced further to end the domestic session at a more than two-year high against the dollar on Wednesday, led by firmer central bank guidance and recent data showing a sustained recovery in the world's second-largest economy.

The onshore yuan opened at 6.6699 per dollar and finished its domestic trading session at 6.6575, strongest such close since July 10, 2018.

Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.6781 per dollar, 149 pips or 0.22% firmer than the previous fix of 6.6930 and the strongest guidance since July 16, 2018.

Traders and analysts said Wednesday's stronger official fixing largely matched market projections and drove the spot market higher.

"The yuan continues to strengthen due to its superior economic backdrop relative to other currency trades," Stephen Innes, chief global markets strategist at Axi, said in a note.

"The better retail sales data for September continues to resonate and signals that domestic demand is holding up."

Official data released this week showed China's economic recovery accelerated in the third quarter as consumers shook off their coronavirus caution.

China's Vice Premier Liu He said the economy will very likely achieve positive growth this year, adding that China's prudent monetary policy should be kept appropriate and flexible, and liquidity reasonably ample.

Ming Ming, chief analyst at Citic Securities, attributed recent yuan strength to changes in Sino-U.S. relations, as differences between economic fundamentals, a softer dollar and disturbances from the U.S. presidential election all supported the yuan.

A trader at a foreign bank said the yuan could march towards 6.6 per dollar level in the near term if authorities do not step in. Several currency traders also noted how far the yuan could strengthen largely depended on the central bank's stance.

"Yuan appreciation could have a contractionary effect on the economy, the central bank apparently does not want to see too rapid a rise in the exchange rate," said Xie Yaxuan, chief macro analyst at China Merchants Securities.

"Although the central bank avoids direct participation in the FX market, it can still affect supply and demand of yuan and dollars through market-based methods."

A second trader at a Chinese bank said he received rising number of client queries to trim dollar positions, while those who wanted dollars were holding back.

(Reporting by Winni Zhou and Andrew Galbraith; Editing by Sam Holmes, Simon Cameron-Moore and Rashmi Aich)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF CHINA LIMITED -0.36% 2.74 End-of-day quote.-17.72%
CHINA MERCHANTS SECURITIES CO., LTD. 1.46% 24.36 End-of-day quote.33.19%
CITIC LIMITED 0.16% 6.18 End-of-day quote.-40.69%
CITIC SECURITIES COMPANY LIMITED -0.70% 31.08 End-of-day quote.22.85%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) -0.04% 6.54691 Delayed Quote.-5.47%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) -0.13% 6.5622 Delayed Quote.-5.53%
Latest news "Economy & Forex"
03:07pWall Street mixed as vaccine hopes collide with poor jobs data
RE
03:03pNOC NATIONAL OIL : Increasing Oil Production Rate … Reinstatement of Mabruk Oil Field … Introducing solar energy to the oil sector … the main topics discussed in the meeting between the National Oil Corporation and TOTAL
PU
03:00pU.S. private payrolls miss expectations as COVID-19 infections spread
RE
02:57pAppeals court schedules Dec. 14 hearing on blocked U.S. TikTok new user ban
RE
02:53pFED : Little to no growth in four of 12 regions as stress mounts
RE
02:36pU.S. congressional negotiators agree on massive defense bill
RE
02:36pU.s. congressional negotiators agree on final version of national defense authorization act, without section 230 repeal demanded by trump
RE
02:35pPeru lawmakers to debate farm law in effort to defuse highway blockade
RE
02:32pU.S. CDC reports 269,763 deaths from coronavirus
RE
02:31pU S BUREAU OF CENSUS : Press Release | December 02, 2020 Household Pulse Survey Phase 3 Biweekly Data Release The U.S. Census Bureau today released new data from the third phase of the experimental Household Pulse Survey.
PU
Latest news "Economy & Forex"