BEIJING: China’s yuan softened against the dollar on Wednesday as firms bought dollars after the offshore yuan hit a one-month low, continuing its weakness this week following the the central bank’s interest rate cut.
“The offshore yuan fell below 6.40, spurring some dollar purchases in the onshore market on expectations of the currency’s further weakness,” said a Chinese commercial bank in Shanghai.
“Some state-owned banks sold small amounts of dollars in onshore market intermittently to support the yuan.”
The People’s Bank of China (PBOC) set the midpoint rate
at 6.3536 per dollar prior to market open, 0.07 percent weaker than the previous fix 6.3494.
The onshore spot market opened at 6.3548 per dollar and was changing hands at 6.3579 at midday, 0.07 percent weaker than the previous close.
The offshore yuan was trading 0.68 percent, or 433 pips, weaker than the onshore spot at 6.4012 per dollar by midday. It hit an intraday low of 6.4045 in early trade, the weakest since Sep. 28.
