SHANGHAI, Dec 25 (Reuters) - The yuan briefly hit a one-week high against an easing U.S. dollar on Friday, as the greenback slipped in global markets after Britain reached a trade deal with the European Union that followed months of negotiations. Risk appetite improved slightly overnight but overall sentiment in the currency markets was tempered by a stalled U.S. coronavirus economic relief package. The spot yuan market opened at 6.5313 per dollar and rose to a high of 6.5266 in morning trade, the yuan"s strongest since Dec. 17. At midday it was changing hands at 6.5282, up 19 pips from the previous late-session close. Trading was thin as financial markets in many countries were shut for Christmas, which discouraged domestic market participants from making huge bets amid a lack of liquidity. The onshore spot price moved in an extremely tight range of less than 50 pips on Friday morning, with volume also shrinking sharply. "The yuan was solely tracking the dollar"s movements in global markets," said a trader at a foreign bank. Several traders said a new coronavirus strain recently detected in Britain and the wrangling over the U.S. stimulus agreement were only likely to bring short-term volatility in the dollar, with its long-term softening trend intact and supporting the Chinese unit. "USD/CNH will likely test and break below the 6.50 level after the recent adjustments," Gao Qi, FX strategist at Scotiabank in Singapore, said in a note on Thursday. Prior to the market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.5333 per dollar, 28 pips firmer than the previous fix of 6.5361. The global dollar index fell to 90.235 at midday, when offshore yuan was trading at 6.5185 per dollar. The yuan market at 0403 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5333 6.5361 0.04% Spot yuan 6.5282 6.5301 0.03% Divergence from -0.08% midpoint* Spot change YTD 6.66% Spot change since 2005 26.78% revaluation Key indexes: Item Current Previous Change Thomson 95.33 95.31 0.0 Reuters/HKEX CNH index Dollar index 90.235 90.331 -0.1 *Divergence of the dollar/yuan exchange rate. A negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from the official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.5185 0.15% * Offshore 6.6729 -2.09% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Winni Zhou and Andrew Galbraith Editing by Edmund Klamann)
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