China Yuan Up On Shanghai-Hong Kong Stock Connect

 
 
 
                                  Vs Parity  Previous 
USD/CNY Central Parity   6.1409               6.1399 
USD/CNY OTC 0830 GMT     6.1241    -0.27%     6.1307 
            High         6.1289    -0.20% 
            Low          6.1239    -0.28% 
 

        SHANGHAI--China's yuan rose against the U.S. dollar late Monday, tracking gains in the offshore yuan as the landmark Shanghai-Hong Kong Stock Connect program kicked off.
        The yuan closed at 6.1241 to the dollar Monday, compared with 6.1307 at Friday's close. The yuan traded between 6.1239 and 6.1281 in the session.
        In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar was at 6.1259 yuan late Monday, much lower than 6.1322 yuan late Friday.
        "It's still too early to say how much the stock connect will boost the Chinese currency, which depends on the stock markets' performance," said a Shanghai-based local bank trader. The benchmark Shanghai Composite Index ended 0.2% lower at 2474.01.
        The Shanghai-Hong Kong Stock Connect program started on Monday, opening up mainland Chinese markets to global capital. The program allows international investors access to shares traded in Shanghai, while also granting wealthy Chinese individuals access to Hong Kong-listed equities.
        The yuan also marched higher as the dollar fell overnight after U.S. data showed inflation expectations fell, which darkened the market's outlook for higher interest rates. U.S. consumers polled in early November expect inflation in the coming year around 2.6%, according to a Thomson-Reuters/University of Michigan preliminary survey. That was down from expectations of 2.9% inflation in October's poll.
        The yuan has fallen 1.2% since the start of 2014; most of the decline was recorded in the first half.
        The People's Bank of China set the dollar/yuan central parity rate at 6.1409, higher than Friday's 6.1399.
        Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.2630/6.2650 from 6.2640/6.2680 late Friday, implying a 2.3% fall by the yuan over the next year.
        Write to Wynne Wang at wynne.wang@wsj.com
        (END) Dow Jones Newswires

        November 17, 2014 04:44 ET (09:44 GMT)

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