* FEBRUARY 25, 2010, 4:40 A.M. ET
UPDATE: China Yuan Slightly Higher Late On Demand From Banks
Vs Parity Pvs
USD/CNY Central Parity 6.8270 6.8271
USD/CNY OTC 0930 GMT 6.8268 0.00% 6.8270
High 6.8274 +0.01%
Low 6.8263 -0.01%
SHANGHAI (Dow Jones)--China's yuan was slightly higher against the U.S. dollar late Thursday afternoon because of moderate demand from banks.
But it traded in a narrow band due to a little-changed dollar-yuan central parity rate and a lack of strong demand for either currency from domestic companies, traders said.
On the over-the-counter market, the dollar was at CNY6.8268 around 0930 GMT, down from Wednesday's close of CNY6.8270. It traded between CNY6.8263 and CNY6.8274.
The People's Bank of China, the central bank, set the session's central parity at 6.8270, barely changed from 6.8271 Wednesday.
"The central parity isn't moving, so the market doesn't move much either," said a Shanghai-based trader at a foreign bank, adding banks' demand for yuan in the afternoon was light.
Traders also said the relatively wide daily trading ranges before and after the Lunar New Year holiday, when the dollar rose sharply against the yuan, doesn't mean the central bank was loosening its hold on the trading band. The dollar has settled within 7 points of CNY6.8270 since the beginning of this year, except for those few sessions.
"The strong U.S. dollar demand before and after the Lunar New Year holiday appears to have subsided," said a Shanghai-based trader at a local bank. "The market is (now) returning to a very narrow trading mode."
Affirming the central bank's stable yuan policy, China's commerce ministry on Thursday reiterated the yuan exchange rate should be kept stable, saying the country's export recovery remains weak and the trade surplus will likely narrow this year.
The comments from ministry spokesman Yao Jian play down the strength of China's exports rebound, which has been cited by economists as a reason for Beijing to allow the yuan to resume its appreciation against the U.S. dollar after China has kept it stable since July 2008. The remarks suggest China, having started to restrain bank lending, will move slowly in scaling back its stimulus policies and reforming its currency policy.
Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6645/6.6685, up from 6.6590/6.6630 late Wednesday.
UPDATE: China Yuan Slightly Higher Late On Demand From Banks
Vs Parity Pvs
USD/CNY Central Parity 6.8270 6.8271
USD/CNY OTC 0930 GMT 6.8268 0.00% 6.8270
High 6.8274 +0.01%
Low 6.8263 -0.01%
SHANGHAI (Dow Jones)--China's yuan was slightly higher against the U.S. dollar late Thursday afternoon because of moderate demand from banks.
But it traded in a narrow band due to a little-changed dollar-yuan central parity rate and a lack of strong demand for either currency from domestic companies, traders said.
On the over-the-counter market, the dollar was at CNY6.8268 around 0930 GMT, down from Wednesday's close of CNY6.8270. It traded between CNY6.8263 and CNY6.8274.
The People's Bank of China, the central bank, set the session's central parity at 6.8270, barely changed from 6.8271 Wednesday.
"The central parity isn't moving, so the market doesn't move much either," said a Shanghai-based trader at a foreign bank, adding banks' demand for yuan in the afternoon was light.
Traders also said the relatively wide daily trading ranges before and after the Lunar New Year holiday, when the dollar rose sharply against the yuan, doesn't mean the central bank was loosening its hold on the trading band. The dollar has settled within 7 points of CNY6.8270 since the beginning of this year, except for those few sessions.
"The strong U.S. dollar demand before and after the Lunar New Year holiday appears to have subsided," said a Shanghai-based trader at a local bank. "The market is (now) returning to a very narrow trading mode."
Affirming the central bank's stable yuan policy, China's commerce ministry on Thursday reiterated the yuan exchange rate should be kept stable, saying the country's export recovery remains weak and the trade surplus will likely narrow this year.
The comments from ministry spokesman Yao Jian play down the strength of China's exports rebound, which has been cited by economists as a reason for Beijing to allow the yuan to resume its appreciation against the U.S. dollar after China has kept it stable since July 2008. The remarks suggest China, having started to restrain bank lending, will move slowly in scaling back its stimulus policies and reforming its currency policy.
Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6645/6.6685, up from 6.6590/6.6630 late Wednesday.