SHANGHAI, April 15 (Reuters) - China's yuan eased against
the dollar on Thursday, snapping three straight days of gains on
higher seasonal corporate greenback demand, while investors
awaited first quarter GDP data for clues about the monetary
Prior to market opening, the People's Bank of China (PBOC)
set the midpoint rate at 6.5297 per dollar, 65 pips
or 0.1% firmer than the previous fix of 6.5362.
In the spot market, the onshore yuan opened at
6.5315 per dollar and was changing hands at 6.5392 at midday, 87
pips weaker than the previous late session close.
Traders said the yuan continued to swing in a tight range
around 6.55 per dollar, with weakness in the morning session
driven by companies seeking to settle dollar payments. Several
market participants expected the local unit to continue tracking
dollar movements in the near-term.
The yuan "should continue to trade along with the broader EM
FX," Brown Brothers Harriman said in a note.
"However, the PBOC has allowed only limited weakness so far
this year and we expected this to continue," it said, adding
revived dollar strength could continue to weaken the yuan.
Separately, China's central bank injected 150 billion yuan
($22.94 billion) worth of medium-term loans into the banking
system earlier in the session, roughly matching 100 billion yuan
worth of maturing such loans and another 56.1 billion yuan worth
of targeted medium-term lending facility (TMLF) expiring later
Traders and analysts said the central bank was keen to
maintain a neutral stance despite higher cash demand expected in
coming days due to quarterly tax payments.
Stephen Innes, chief global markets strategist at Axi, said
the operations suggested that "the bank was likely to maintain
zero net injections", which was "not great for an economy that
was not overheating."
However, some currency traders said a lot of market
attention would be soon shifted to China's first quarter GDP,
which is expected to show a strong economic rebound during the
period due to low base effect, to gauge if policymakers would
make any changes to its monetary policy stance.
"We expect real GDP growth to have jumped to 20%
year-on-year in Q1 from 6.5% in Q4-2020, led by an overheated
industrial sector and a recovering services sector," economists
at Standard Chartered said in an earlier note.
The global dollar index rose to 91.683 by midday,
while the offshore yuan was trading at 6.5426 per
The yuan market at 0400 GMT:
Item Current Previous Change
PBOC midpoint 6.5297 6.5362 0.10%
Spot yuan 6.5392 6.5305 -0.13%
Divergence from 0.15%
Spot change YTD -0.17%
Spot change since 2005 26.57%
Item Current Previous Change
Thomson 96.31 96.34 0.0
Dollar index 91.683 91.619 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
OFFSHORE CNH MARKET
Instrument Current Difference
Offshore spot yuan 6.5426 -0.05%
Offshore 6.7224 -2.87%
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint,
since non-deliverable forwards are settled against the midpoint.
($1 = 6.5388 Chinese yuan)
(Reporting by Winni Zhou and Andrew Galbraith; Editing by Sam