* MARCH 3, 2010, 4:51 A.M. ET
UPDATE: China Yuan Up Late On Dollar's Overnight Fall
SHANGHAI (Dow Jones)--China's yuan rose against the U.S. dollar late Wednesday due to the U.S. unit's broad weakness against major currencies overnight.
On the over-the-counter market, the dollar was at CNY6.8258, down from CNY6.8265 late Tuesday. It traded between CNY6.8255 and CNY6.8265.
The People's Bank of China set the dollar-yuan central parity rate at CNY6.8266, down slightly from CNY6.8268, though the U.S. dollar declined against most of its rivals Tuesday after the Australian and Canadian central banks gave upbeat assessments of their economies.
Late Tuesday, the euro was at $1.3607, up from $1.3559 late Monday, and the U.S. dollar was at Y88.75, down from Y89.07.
"The yuan's rise against the dollar will be limited," said a Shanghai-based trader at a foreign bank.
"China's latest data didn't give a clear picture about the country's economy, so the People's Bank of China is unlikely to let the yuan rise before there are clear signs that inflation is picking up," he said.
China's government-backed Purchasing Manufacturers Index fell to 52.0 in February from 55.8 in January, the China Federation of Logistics and Purchasing said Monday. February was the second consecutive month in which the PMI declined after the index peaked at 56.6 in December.
Dealers said the foreign exchange-rate regime may not be on the central bank's agenda at the moment because the government is focused on cooling the domestic property market and reigning in excessive bank lending.
"It's hard to predict when China will revalue its currency, but it's almost certain that there will be little volatility in dollar-yuan trading in the new few weeks as all eyes are on China's top legislative meeting," said a Shanghai-based trader at a foreign bank.
This year's annual legislative session, during which Premier Wen Jiabao will present the government's economic plans for the year, starts Friday.
Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6515/6.6615, up from 6.6470/6.6570 late Tuesday.
UPDATE: China Yuan Up Late On Dollar's Overnight Fall
SHANGHAI (Dow Jones)--China's yuan rose against the U.S. dollar late Wednesday due to the U.S. unit's broad weakness against major currencies overnight.
On the over-the-counter market, the dollar was at CNY6.8258, down from CNY6.8265 late Tuesday. It traded between CNY6.8255 and CNY6.8265.
The People's Bank of China set the dollar-yuan central parity rate at CNY6.8266, down slightly from CNY6.8268, though the U.S. dollar declined against most of its rivals Tuesday after the Australian and Canadian central banks gave upbeat assessments of their economies.
Late Tuesday, the euro was at $1.3607, up from $1.3559 late Monday, and the U.S. dollar was at Y88.75, down from Y89.07.
"The yuan's rise against the dollar will be limited," said a Shanghai-based trader at a foreign bank.
"China's latest data didn't give a clear picture about the country's economy, so the People's Bank of China is unlikely to let the yuan rise before there are clear signs that inflation is picking up," he said.
China's government-backed Purchasing Manufacturers Index fell to 52.0 in February from 55.8 in January, the China Federation of Logistics and Purchasing said Monday. February was the second consecutive month in which the PMI declined after the index peaked at 56.6 in December.
Dealers said the foreign exchange-rate regime may not be on the central bank's agenda at the moment because the government is focused on cooling the domestic property market and reigning in excessive bank lending.
"It's hard to predict when China will revalue its currency, but it's almost certain that there will be little volatility in dollar-yuan trading in the new few weeks as all eyes are on China's top legislative meeting," said a Shanghai-based trader at a foreign bank.
This year's annual legislative session, during which Premier Wen Jiabao will present the government's economic plans for the year, starts Friday.
Offshore, one-year dollar-yuan nondeliverable forwards were at 6.6515/6.6615, up from 6.6470/6.6570 late Tuesday.