BEIJING: China’s yuan fell on Thursday in the offshore market in Hong Kong, with speculation about a near-term US rate rise pushing up the dollar and offsetting a strong rally in Hong Kong stocks, which should increase demand for the yuan, traders said.
The greenback hovered around a one-week high in early Asian trade after two influential Federal Reserve officials kept alive expectations of a relatively early US rate rise.
Falling for the third straight session, the offshore yuan dropped to its weakest level since March 30, changing hands at 6.2102 per dollar by midday, down 0.06 per cent from Wednesday’s close.
Hong Kong stocks jumped as much as 6 per cent on Thursday morning, posting solid gains for the second day as mainland Chinese investors snapped up shares under the Shanghai-Hong Kong Stock Connect scheme.
“The stock rally has limited impact on the offshore yuan for now,” said a senior currency trader
at an Asian bank in Shanghai.
“In the longer term, however, as more capital flows into Hong Kong, the offshore yuan will be under appreciation pressure.” That was echoed by other market players.
