Chinese Yuan Rises, Concerns Over Ceiling Gains From Economic Recovery


SHANGHAI, September 28 (Reuters)Helped by a firmer daily fixing, the yuan strengthened slightly against the dollar on Tuesday, although several investment banks lowered economic growth forecasts for China.

Goldman Sachs said in a note it had lowered its 2021 growth forecast for China to 7.8% from 8.2%, as energy shortages and sharp cuts in industrial production add “pressure significant decline “.

The People’s Bank of China (PBOC) also changed wording in a statement after its last quarterly Monetary Policy Committee meeting to remove a reference to “stable and consolidating growth” contained in the previous statement.

“The PBOC downgraded its assessment to China’s growth prospects,” said Ken Cheung, chief Asian currency strategist at Mizuho Bank in Hong Kong.

“In our opinion, the PBOC pays more attention to maintaining the stable growth of credit expansion as well as its effectiveness in supporting the real economy.

Before the market opens, the PBOC set the median rate CNY = PBOC at 6.4608 per dollar, 87 pips or 0.13% firmer than the previous patch of 6.4695.

The spot market CNY = CFXS opened at 6.4596 to the dollar and changed hands at 6.4556 by noon, 14 pips firmer than the previous session’s close late in the day.

Doubts over the post-pandemic economic recovery have overshadowed any optimism that China-U.S. Relations improved for investors from the release of Huawei Technologies Co CFO Meng Wanzhou, who returned to China. this weekend, after more than 1000 days under house arrest in Canada.

Separately, US yields were pulled higher by a hawkish move from the Federal Reserve, with benchmark 10-year Treasury yields US10YT = RR hitting a three-month high of 1.516% overnight, sparking speculation this could lead to capital outflows from China, as investors seek higher returns.

“The RMB was expected to remain resilient in the face of rising UST yields as the currency remains in the sweet spot of carry advantage and stable macroeconomic fundamentals relative to other emerging market peers,” Maybank analysts said in a statement. note.

At noon, the world dollar index = USD rose to 93.453 from the previous close of 93.411, while the offshore yuan CNH = D3 was trading at 6.459 to the dollar.

The yuan market at 04:00 GMT:

PLACE ON LAND:

Item

Running

Previous

Switch

Midpoint of PBOC CNY = SAEC

6.4608

6.4695

0.13%

Yuan spot CNY = CFXS

6.4556

6.457

0.02%

Divergence from midpoint *

-0.08%

Cash change for the current year

1.13%

Spot change since 2005 revaluation

28.21%

Key indexes:

Item

Running

Previous

Switch

Thomson Reuters / HKEX CNH Index

99.48

99.33

0.2

Dollar index

93,453

93,411

0.0

* Divergence in dollar / yuan exchange rate. A negative number indicates that the 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 median rate it sets each morning.

CNH OFFSHORE MARKET

Instrument

Running

Difference with onshore

Cash yuan off CNH = *

6.459

-0.05%

Offshore not deliverable in the future CNY1YNDFOR = **

6.6387

-2.68%

* Premium for the offshore spot on onshore CNY = CFXS

** The figure reflects the difference from the official PBOC midpoint, as undeliverable futures are settled relative to the midpoint. CNY = SAEC.

(Reporting by Winni Zhou and Andrew Galbraith; Editing by Simon Cameron-Moore)

(([email protected]; +86 21 2083 0100; Reuters messaging: [email protected]))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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