Under Pressure Yuan Faces Into a Period of Seasonal Weakness
- Dividend payouts and foreign travel may weigh on the yuan
- Some analysts see currency weakening to 7 per dollar
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A lackluster year for the yuan looks set to take a turn for the worse if history is a guide, with seasonal dividend payouts and a traditional period for foreign vacations set to weigh.
Chinese firms listed in Hong Kong are set to pay out dividends totaling $80.1 billion this year, of which $68 billion are due in the three months from June, based on preliminary calculations by Bloomberg which are subject to change as companies firm up their schedules. Meanwhile, outbound travel bookings for next week’s Labor Day holiday have jumped, adding impetus to a seasonal wave of foreign currency purchases from local buyers.