SHANGHAI, May 7 (Reuters) - China's yuan jumped to a more
than two-month high against a softer dollar on Friday, with
buoyant trade data lending additional support.
The gain helped extend the yuan's weekly winning streak to
five, the longest since September.
The dollar dropped as global market risk appetite improved
after data showed that fewer Americans filed new claims for
unemployment benefits last week, with COVID-19 vaccination
efforts and government stimulus leading to a further reopening
of the economy.
Prior to the market opening, the People's Bank of China
(PBOC) set the midpoint rate at 6.4678 per dollar,
217 pips or 0.34% firmer than the previous fix of 6.4895.
Some market participants pointed out that Friday's fixing
came in weaker than their projections and had relatively large
estimate errors, a sign that the authorities might be willing to
see more two-way fluctuations in the local unit before testing
the key 6.45 per dollar level.
In the spot market, onshore yuan opened at 6.4655
per dollar and rose to a high of 6.4564 at one point, the
strongest level since March 3. By midday, the spot yuan was
changing hands at 6.4594, 37 pips firmer than the previous late
session close.
If the yuan finishes the late night session at the midday
level, it would have booked a fifth straight weekly gain for the
holiday-shortened week.
Traders said domestic markets would pay close attention to
U.S. non-farm payroll data for more clues about the health of
world's largest economy. A very robust reading could fuel more
speculation on when the Federal Reserve may begin tapering
emergency support, altering the dollar's trajectory.
U.S. payrolls data due at 1230 GMT will likely confirm the
economy's solid path to recovery from the pandemic, analysts
said. Economists expect 978,000 new U.S. jobs for April,
according to a Reuters poll.
Strong Chinese trade data also underpinned the yuan, traders
said, as improvements in economic fundamentals were crucial to
yuan's longer-term performance.
Export growth unexpectedly picked up in April, data showed
on Friday, as the world's second-largest economy extended its
recovery from the COVID-19 pandemic.
"Export will be a key pillar for growth in China this year.
It also helps RMB to perform well among emerging market
currencies," said Zhang Zhiwei, chief economist at Pinpoint
Asset Management, expecting export growth to stay strong into
the second half of this year.
At midday, the global dollar index fell to 90.866
from the previous close of 90.873, while the offshore yuan
was trading at 6.4555 per dollar.
The yuan market at 0403 GMT:
ONSHORE SPOT:
Item Current Previous Change
PBOC midpoint 6.4678 6.4895 0.34%
Spot yuan 6.4594 6.4631 0.06%
Divergence from -0.13%
midpoint*
Spot change YTD 1.07%
Spot change since 2005 28.13%
revaluation
Key indexes:
Item Current Previous Change
Thomson 97.16 97.12 0.1
Reuters/HKEX
CNH index
Dollar index 90.866 90.873 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 6.4555 0.06%
*
Offshore 6.6289 -2.43%
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 Kim
Coghill)
Read More
