Asia

Thursday, December 10, 2015 - 03:14

China's Yuan Near Post-Devaluation Low; PBOC Intervention Eyed


BEIJING (MNI) - The yuan fell for a fifth consecutive trading day Thursday approaching the August low seen immediately after devaluation. People's Bank of China intervention may be imminent, traders said.

The yuan fell as low as 6.4411 against the U.S. dollar Thursday - its weakest since 6.4470 Aug. 13. It fell to an intraday low of 6.4510 Aug. 12.

Recent yuan movements are efforts by the PBOC for more volatility rather than its guiding sharp depreciation, traders said. The central bank may intervene at any time.

"Now the yuan is near the August low - a level at which PBOC assistant governor Zhang Xiaohui described that month as 'releasing yuan depreciation pressure.'" We don't think the yuan will fall below this level by too much. Investors should watch out for PBOC intervention," a Beijing-based trader with one of the big four banks said.

"The PBOC is intervening a lot less recently - a strong deterrent to anyone trying to short the yuan. We built some long dollar positions last night but pocketed our profit this morning. We dare not hold long dollar positions for too long. The PBOC could come back any time," a Shanghai-based trader with a market-marker bank said.

The yuan was traded at 6.4383 against the U.S. dollar in the final hour of trading. If it ended there it would be its weakest close since Aug. 5, 2011.

--MNI Singapore Bureau; tel: +65 9189-5705; email: allen.feng@mni-news.com
--MNI Singapore Bureau; tel: +65 9023-5864; email: glen.perkinson@mni-news.com

[TOPICS: MMQPB$,M$A$$$,M$Q$$$]

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