The Yuan has fallen against the US Dollar as state-run Chinese banks sold off the local currency in what appeared to be an attempt to prevent the Yuan from rising too quickly.
In Asian trading the Dollar was under downward pressure due to its broad weakness against the majority of its most traded peers.
“Traders have turned cautious after an unexpected jump in the Dollar/Yuan pair late Thursday afternoon, the last minute strong buying of the Dollar came by again on Friday,” said a Chinese bank trader at a local bank, adding that much of the Dollar buying came from state-run Chinese banks. The U.S. currency rebounded sharply on late Thursday after hitting an all-time low of CNY6.1143.
Traders believe that national banks were buying up Dollars in a bid to satisfy China’s regulations governing their foreign loan-to-deposit ratios. Under the rules Chinese banks must limit the ratio of 75%, but few meet the target.
On Wednesday the Yuan hit a new record high against the US Dollar as it reached its highest level since China created its foreign currency market in 1994. Recently, China has been taking steps to lessen its dependence on exports, and a stronger currency gives its consumers more spending power.
Data out of China has also supported the majority of commodity based currencies after the world’s second largest economy posted improvements to industrial production and retail sales.
Current Yuan (CNY) Exchange Rates
The Pound Sterling/ Chinese Yuan Exchange Rate is currently in the region of: 9.5301
The Euro/Chinese Yuan Exchange Rate is currently in the region of: 8.2017
The US Dollar/Chinese Yuan Exchange Rate is currently in the region of: 6.1270
The Australian Dollar/Chinese Yuan Exchange Rate is currently in the region of: 5.61145
The New Zealand Dollar/Chinese Yuan Exchange Rate is currently in the region of: 4.9162
The Canadian Dollar/Chinese Yuan Exchange Rare is currently in the region of: 5.9467
(Correct as of 12:00 pm GMT)