In the spot market, the onshore yuan opened at 6.8900 per dollar and was changing hands at 6.8958 at midday, 92 pips weaker than the previous late session close. Currency traders will be closely watching the release of China's official manufacturing purchasing managers' index (PMI). A Reuters poll showed the official manufacturing PMI for March is expected at 51.5 compared with 52.6 in February, when the index marked its fastest pace of growth in more than a decade. A strong manufacturing PMI could push the offshore spot yuan rate, which was trading at 6.8977 per dollar at midday, towards 6.82, Citi analysts said. China's economic performance improved in March from the first two months of the year and the country will expand domestic demand and consolidate its economic recovery, Premier Li Qiang said on Thursday at an economic forum in Boao. Meanwhile, the U.S. dollar index rose as fears over the bank sector receded. "Given waning concerns over the banking sector, the market's attention will shift back to the economy and price stability," analysts at Commerzbank said. Maybank analysts said they continue to see room for a dollar rebound if markets continue to lean towards a rate hike in May.
By midday, the global dollar index had risen to 102.708 from the previous close of 102.640.
The one-year forward value for the offshore yuan traded at 6.7361 per dollar, implying 2.40% appreciation within 12 months. The yuan market at 0345 GMT:
ONSHORE SPOT:
Item Current Previous Change
PBOC midpoint 6.8886 6.8771 -0.17% Spot yuan 6.8958 6.8866 -0.13% Divergence from 0.10%
midpoint*
Spot change YTD 0.06%
Spot change since 2005 20.02%
revaluation
Key indexes:
Item Current Previous Change
Dollar index 102.708 102.64 0.1
*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% from official midpoint rate it sets each
morning.
OFFSHORE CNH MARKET
Instrument Current Difference
from onshore
Offshore spot yuan 6.8977 -0.03%
*
Offshore 6.7321 2.32%
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 Li Gu and Brenda Goh; Editing by Edmund Klamann)
