Yuan Rises to Two-Week High as PBOC Ends Run of Weaker Fixing
The People’s Bank of China raised the reference rate by 0.06 percent to 6.2856 per dollar after data yesterday showed manufacturing expanded for a fourth month. The Purchasing Managers Index published by HSBC Holdings Plc and Markit Economics showed a preliminary reading of 50.4 for February, compared with the final 52.3 for January and the median estimate of 52.2 in a Bloomberg survey.
“Although the PMI data disappointed the market, it’s still resilient relative to other major economies,” said Patrick Cheng, a foreign-exchange analyst at Haitong International Securities Co. in Hong Kong. “Room for yuan declines is limited.”
The currency rose 0.07 percent to close at 6.2295 per dollar in Shanghai, prices from the China Foreign Exchange Trade System show. It touched 6.2284 earlier, the strongest level since Feb. 8. The spot rate is at 0.92 percent premium to the fixing, compared with the maximum 1 percent allowed.
The U.S. Senate Finance committee is due to deliberate today the nomination of Jack Lew by President Barack Obama for U.S. Treasury secretary.
“I would press China to move to a market-determined exchange rate, level the playing field for our workers and firms,” Lew said in written responses to questions from committee ranking member Orrin Hatch.
In Hong Kong’s offshore market, the yuan gained 0.02 percent to 6.2293 per dollar, according to data compiled by Bloomberg. Twelve-month non-deliverable forwards slipped 0.02 percent to 6.3260, a 1.5 percent discount to the onshore spot rate.
Hong Kong’s government will announce the sale of HK$10 billion ($1.3 billion) of inflation-linked bonds, the city’s third such issuance, a person familiar with the plan said today, asking not to be named as the details aren’t public yet.
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