China's yuan weakens as share rally falters, dollar firms

China's yuan weakens as share rally falters, dollar firms

10 Jul 2020 11:15 AM
 

The yuan pulled back from a four-month high against the dollar on Friday as China's stock market rally ran out of steam, but the currency remains on course for its strongest weekly performance since at least January.

By midday, spot yuan was changing hands at 7.0037 per dollar, 113 pips weaker than the late session close. That was despite the People's Bank of China (PBOC) setting the midpoint of its daily trading band at 6.9943 per dollar, the strongest since March 12.

The currency weakened past the closely watched 7-per-dollar level it had breached a day earlier on the way to its strongest close since March.

The yuan has gained around 0.8% this week, powered by strong foreign investment flows into China's stock market, with investors chasing an officially sanctioned bull market that has driven the country's benchmark index to five-year highs.

That rally paused on Friday, with the Shanghai Composite index 1.05% lower by midday.

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