Chinese yuan tumbles versus USD amid corporate demand for greenback

Chinese Yuan

The Chinese yuan fell on Thursday against the corporate demand for the US dollar reached a high level, pushing China’s central bank to set its chip currency to its fresh three-week low.

On Thursday, the renminbi finished down by 4 basis points and last traded at 6.81976 per US dollar, according to the figures from the China Foreign Exchange Trade System.

The settlement yesterday was a fresh record low for his currency, hitting its lowest level in more than three weeks.

The decline was spurred by a strong seasonal dollar demand as the distribution of dividends in major oil companies steered big firms to purchase greenback for business purposes. And for the Chinese yuan, the level of corporate demand for US dollar is always crucial on its trading performance, which resulted to a pull down for the renminbi.

The Chines yuan is allowed to rise or fall by 2% in the China’s spot foreign exchange market. The spot market opened its Thursday bid at 6.8306 per dollar and climb slightly at 6.8317 in the mid-session, 0.18% weaker than the midpoint. This bout of weakness of the Chinese yuan has been an outcome of the strong gains recorded by the dollar since the start of the month.

Meanwhile, the Global CNH index, a gauge of the performance of the offshore yuan against its major peers on a day-to-day basis, lost 0.01% to settle down at 94.29 from 94.43 on the previous close.

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