Yuan Wobbles

Chinese yuan weakened on Thursday along with the euro and sterling as the US dollar strengthened on tax reforms proposed by US President Donald Trump.

Onshore yuan, which is mainly traded in Shanghai, was at 6.8970 per dollar in early trading on Thursday, down 0.08 per cent from Wednesday when it weakened 0.14 per cent.

Offshore yuan, traded in Hong Kong, was down 0.09 per cent on Thursday morning to 6.9018 after it had fallen 0.11 per cent on Wednesday.

The weaker yuan came as the People’s Bank of China set the yuan reference rate at 6.8896 per US dollar, weaker by 0.07 per cent or 51 basis points from Wednesday’s fix.

“While US tax reform details remain elusive, the bottom line should be dollar positive. We’ve seen a move higher for the dollar on regional currencies as dollar demand is starting to perk up,” said Stephen Innes, senior trader at Oanda

“Investor confidence in China will be fraught with uncertainty through 2017 as US interest rates are expected to rise and mainland officials deal with the perils of deleveraging the China money ball. Restoring financial stability will be high on the politburo’s agenda,” he said.

South China Morning Post

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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