Yuan hits 11-week low ahead of Pelosi’s expected Taiwan visit

Author of the article: SHANGHAI — The yuan hit an 11-week low against the greenback on Tuesday as diplomatic tension ahead of an expected Taiwan visit by U.S. House of Representatives Speaker Nancy Pelosi pressured the Chinese currency. The U.S. politician was set to arrive in Taipei later in the day, people briefed on the…
Yuan hits 11-week low ahead of Pelosi’s expected Taiwan visit

Author of the article:

SHANGHAI — The yuan hit an 11-week low

against the greenback on Tuesday as diplomatic tension ahead of

an expected Taiwan visit by U.S. House of Representatives

Speaker Nancy Pelosi pressured the Chinese currency.

The U.S. politician was set to arrive in Taipei later in the

day, people briefed on the matter said, as the United States

said it would not be intimidated by Chinese “saber rattling”

over a visit to a self-governing island that China regards as a

renegade province.

Onshore yuan touched 6.7835 per U.S. dollar in

morning trade, its lowest since May 16, before recouping some

losses. Offshore yuan fell as far as 6.7945.

Yuan weakness comes even as the greenback eased overnight

on signs U.S. economic activity was moderating,

strengthening expectations for the Federal Reserve to slow its

pace of monetary tightening.

Pelosi’s Taiwan visit “would certainly have a negative

impact on market sentiment,” said hedge fund manager Yuan Yuwei

at Water Wisdom Asset Management.

But the biggest risk to the currency is China’s economic

fragility amid tough COVID-19 containment policies, though

dollar weakness could lend short-term support, he said.

Latest factory activity data showed China’s wobbly economy

stumbled further at the start of the second half of the year

with factories reducing output, a slump in the property sector

deepening and job cuts widespread.

Fund manager Yuan also said increasing willingness from

U.S.-sanctioned Russia to use the Chinese currency is a positive

for its value.

Russian aluminum producer RUSAL on Friday said it had

become the first company to issue yuan bonds in Russia.

The yuan market at 0442 GMT:

ONSHORE SPOT:

Item Current Previous Change

PBOC midpoint 6.7462 6.7467 0.01%

Spot yuan 6.7686 6.7675 -0.02%

Divergence from 0.33%

midpoint*

Spot change YTD -6.11%

Spot change since 2005 22.28%

revaluation

Key indexes:

Item Current Previous Change

Thomson 0.0

Reuters/HKEX

CNH index

Dollar index 105.247 105.45 -0.2

*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 percent from official midpoint rate it sets each

morning.

OFFSHORE CNH MARKET

Instrument Current Difference

from onshore

Offshore spot yuan 6.7799 -0.17%

*

Offshore 6.7353 0.16%

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 Shanghai newsroom; Editing by Christopher

Cushing)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Oil Climbs as Russia’s Cut to Natural Gas Flows Escalates Crisis
Read More

Oil Climbs as Russia’s Cut to Natural Gas Flows Escalates Crisis

Author of the article: Bloomberg News Elizabeth Low and Alex Longley (Bloomberg) — Oil edged higher after Russia cut natural gas supplies to Poland and Bulgaria, escalating Europe’s energy crisis. West Texas Intermediate traded above $102 a barrel after gaining 3.2% on Tuesday. European gas prices surged as much as 24% Wednesday after Russia halted…
Gold slips ahead of Ukraine-Russia peace talks
Read More

Gold slips ahead of Ukraine-Russia peace talks

Author of the article: Gold prices fell on Monday as hopes of progress in Russia-Ukraine peace talks to be held this week dented safe-haven demand for bullion, while a stronger U.S. dollar and higher yields further weighed on the metal. FUNDAMENTALS * Spot gold fell 0.5% to $1,947.90 per ounce, as of 0151 GMT. U.S.…