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SHANGHAI: China’s yuan on Monday bounced from a more than three-week low against the dollar hit in the previous session, but losses were trimmed as investors continued to digest US jobs data and the monetary policy trajectory in the world’s largest economy.
Market participants in China’s FX market were cautious ahead of key economic data, including China’s December credit lending, trade and inflation due later this week and fourth-quarter GDP data next week, looking to gauge the health of the economy, traders said.
“Deflationary risks remain high and so we expect further easing in the coming weeks,” said Win Thin, global head of currency strategy at Brown Brothers Harriman, said in a note. Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1006 per dollar, 23 pips firmer than the previous fix of 7.1029.
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