The Chinese yuan weakened against the U.S. dollar in the Asian session on Tuesday, on signs of capital outflow amid speculation that the central bank will ease monetary policy.
Yuan positions for foreign-exchange purchases at Chinese financial institutions fell 108.3 billion yuan (S$23.4 billion) to 29.3 trillion yuan in January, the lowest in a year, according to People’s Bank of China figures released Tuesday.?
Against the greenback, the yuan fell to nearly a 6.2549 from an early high of 6.2073. At yesterday’s close, the yuan was trading at 6.2487 against the greenback.
If the yuan extends its downtrend, it is likely to find support around the 6.27 area.
The People Bank of China set today’s central parity rate for yuan at 6.1330 per dollar, compared to Monday’s reference rate of 6.1273. The central bank sets the reference rate every morning and allows the currency to move upto 2 percent from that level.
The material has been provided by InstaForex Company – www.instaforex.com