Onshore yuan strengthens to one-week high against US dollar
The onshore yuan closed at 6.6682 per US dollar on Tuesday, marking a one-week high as the US dollar index weakened. The midpoint rate also rebounded from a half-month low. Analysts attributed the gain to improved risk appetite after overnight US stock market gains, though trading remained cautious
The onshore yuan strengthened to a one-week high on Tuesday, closing at 6.6682 against the US dollar, up 53 pips from the previous day's closing price, according to Hong Kong's RTHK.
The People's Bank of China set the daily midpoint rate at 6.7167 per US dollar, rebounding from a half-month low. The rate was about 510 pips weaker than market forecasts, indicating continued official efforts to manage the pace of yuan appreciation.
Market participants said the yuan's gains were driven by a sharp rally in US stocks overnight, which boosted risk appetite and weighed on the US dollar index. However, intraday trading remained within a narrow range as markets awaited the release of US inflation data later this week.
China's trade surplus exceeded US$100 billion in October, and analysts expect continued demand from exporters to convert foreign currency receipts to push the yuan higher. At the same time, regulators appear inclined to moderate both the scale and pace of any appreciation, suggesting the yuan will trade in a range-bound fashion in the near term.