China Yuan Down Late; Corporates Buy Dollar for Statement

 
                                  Vs Parity  Previous 
USD/CNY Central Parity   6.1387               6.1417 
USD/CNY OTC 0830 GMT     6.1249    -0.22%     6.1245 
            High         6.1258    -0.21% 
            Low          6.1191    -0.32% 
 

        SHANGHAI--China's yuan fell slightly against the U.S. dollar late Friday as corporate clients bought the greenback to meet month-end settlement needs.
        On the over-the-counter market, the dollar ended at 6.1249 yuan, up from Thursday's close of 6.1245 yuan. It traded in a range of 6.1191 yuan to 6.1258 yuan.
        Before the market opened, China's central bank set the dollar/yuan central parity rate at 6.1387, lower than Thursday's 6.1417. With the central bank guidance, the Chinese yuan opened higher against the dollar and was held around 6.1220 in the morning session.
        However, the dollar recovered losses in the afternoon. "I think the companies are buying the dollar to meet their month-end needs for trade settlement," said a Shanghai-based trader at a European bank.
        Traders said they expect the dollar to consolidate in a range of 6.10 yuan to 6.13 yuan before the end of this year.
        "Expectations of yuan appreciation have abated because of a series of weak economic data. Now investors are putting a bet on the dollar," said another Shanghai-based trader with an Asian bank.
        Latest data including China's consumer inflation, manufacturing activities and real estate investment all pointed to the risks of a further slowdown in the world's second-largest economy. By contrast, upbeat numbers for U.S. inflation, unemployment and manufacturing spurred hopes of interest-rate hikes.
        The yuan has fallen 1.2% against the dollar since the start of 2014, with most of the losses recorded in the first half of the year.
        Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.2470/6.2500 from 6.2530/6.2564 late Thursday, implying a roughly 2% fall by the yuan over the next year.
        In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar was at 6.1262 yuan late Friday, lower than 6.1274 yuan late Thursday.
        Write to Rose Yu at rose.yu@dowjones.com
        (END) Dow Jones Newswires

        November 21, 2014 04:11 ET (09:11 GMT)

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