SHANGHAI, April 22 (Reuters) - China's yuan firmed to its
strongest level against the dollar in nearly six weeks on
Thursday as easing U.S. Treasury yields took the greenback to
multi-week lows against major currencies.
"We're continuing to watch the euro in the near term, which
may put pressure on the U.S. dollar index. If the index dips
further toward 90, the yuan could test 6.45," said a trader at a
foreign bank.
The yuan's strength came after the People's Bank of China
set its strongest daily midpoint fixing for the yuan
since March 18, at 6.4902 per dollar. It was also the first time
since that date that the fixing had been set firmer than 6.5 per
dollar.
Spot yuan opened at 6.4906 per dollar and
strengthened to as much as 6.4828 at one point, its firmest
since March 12. It eased to 6.4875 by midday but was still 28
pips firmer than Thursday's late session close.
The offshore yuan rose to its strongest level since
March 12, touching 6.4805 before trimming gains to 6.4839 at
midday.
The European Central Bank is set to keep policy unchanged in
a meeting Thursday, but analysts say positive comments about the
economic outlook or hints of tapering bond purchases could send
the euro higher.
The meeting comes after a closely watched auction of U.S.
20-year Treasuries drew strong demand, helping to put a cap on
yields that had risen last month amid worries over accelerating
inflation.
The global dollar index stood at 91.1, little changed
from the previous close of 91.11.
The yuan market at 4:00AM GMT:
ONSHORE SPOT:
Item Current Previous Change
PBOC midpoint 6.4902 6.5046 0.22%
Spot yuan 6.4875 6.4903 0.04%
Divergence from -0.04%
midpoint*
Spot change YTD 0.63%
Spot change since 2005 27.58%
revaluation
Key indexes:
Item Current Previous Change
Thomson 96.81 96.81 0.0
Reuters/HKEX
CNH index
Dollar index 91.1 91.11 0.0
*Divergence of the dollar/yuan exchange rate. 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 official midpoint rate it sets each
morning.
OFFSHORE CNH MARKET
Instrument Current Difference
from onshore
Offshore spot yuan 6.4839 0.06%
*
Offshore 6.6544 -2.47%
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 Andrew Galbraith; Editing by Kim Coghill)
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