DOW JONES NEWSWIRES
Vs Parity Pvs USD/CNY Central Parity 6.7750 6.7787 USD/CNY OTC 0930 GMT 6.7750 0.00% 6.7761 High 6.7752 0.00% Low 6.7730 -0.03%
China's yuan was higher against the U.S. dollar Friday afternoon, driven by the euro's strength against the U.S. unit overnight and exporters' month-end demand for the local currency.
But a relatively steady dollar-yuan central parity rate kept traders from taking large positions, traders said, adding they expect the dollar to stay in its recent trading range of CNY6.7700-CNY6.7800 in the near term.
On the over-the-counter market, the dollar was at CNY6.7750 around 0930 GMT, down from Thursday's close of CNY6.7761. It traded between CNY6.7730 and CNY6.7752. For the week, the yuan appreciated 0.08% against the dollar.
The People's Bank of China set the dollar-yuan central parity rate at 6.7750, down from 6.7787 Thursday, after the euro hit a 12-week high against the dollar overnight because of improving euro-zone economic data.
The euro rose to $1.3090 in late New York trade Thursday, from $1.2988 late Wednesday. The euro was at $1.3016 around 0930 GMT.
"There's some dollar selling given the lower fixing and a stronger euro," said a Shanghai-based trader at a European bank. "But overall it's still range-bound."
Traders said the lack significant fluctuations was partly the result of thinner trading during summer months and a lack of market-moving news.
They said the recent series of comments from central bank officials on China's foreign exchange reforms has had little impact on the market.
"So long as the central parity rate remains stable, it makes no difference what the PBOC says," said a Shanghai-based trader at local bank.
PBOC Vice Gov. Hu Xiaolian said Friday evaluations of yuan exchange rate reform should focus on China's general trade situation, not individual firms, apparently aiming to play down the negative impacts of yuan appreciation on Chinese companies.
The comments were included in the fifth of a series of statements by Hu following the central bank's June 19 decision to increase the flexibility of the yuan exchange rate. The statements appear to target critics who say yuan appreciation will hurt the country's fragile exports recovery.
Also Friday, Yi Gang, another PBOC vice governor, said China's ultimate goal is to move toward a fully convertible currency, and in international practice convertible currencies are generally free-floating.
Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6834/6.6874, down from 6.6860/6.6900 late Thursday.
-By Joy C. Shaw, Dow Jones Newswires; (886-2) 2502-2557; joy.shaw@dowjones.com
From The Wall Street Journal published on JULY 30, 2010, 5:46 A.M. ET