Yuan continues downward trend as China sets rate below 6.91

The yuan was trading slightly stronger on Friday morning than on Thursday, although it remains near record lows as the People’s Bank of China continues to bring down the reference rate.

Onshore yuan in Shanghai remained traded at 6.9144 to the US dollar at 10.20 am, slightly stronger than the 6.9195 seen on Thursday’s close.

Offshore yuan in Hong Kong traded at 6.9446 to the US dollar at 10.20 am, also slightly stronger than Thursday’s 6.9449 but still near Wednesday’s record 6.9585 close.

The People’s Bank of China on Friday set the yuan reference point against the US dollar at 6.9168 basis points or 0.12 per cent weaker than on Thursday.

Traders are allowed to trade up to 2 per cent either side of the reference point for the day.

Aside from Tuesday when the reference point was set higher than the day before, the PBOC has been weakening the yuan every day since November 4.

Stephen Innes, senior trader at Oanda Pacific, is now expecting the currency to trade at 7 to the US dollar by year end.

The US dollar was up near a 14-year high on Thursday before pulling back, strengthened by positive economic data and bets that Donald Trump’s presidency will bring inflation up and drive interest rates higher.

(SCMP)