China’s yuan traded near a three- week low as mounting concern Europe’s debt crisis will worsen bolstered demand for dollars.
The central bank set the yuan’s reference rate at the weakest level since Nov. 3 after the U.S. Dollar Index traded on ICE futures in New York, a gauge of the greenback’s strength, climbed 1.4 percent in the last two days. South Korea canceled artillery drills planned for today on Yeonpyeong island, where four people were killed last week as a result of shelling by North Korea.
“The risk-aversion sentiment is strong because there are so many uncertainties in the European debt crisis and the tension on the Korean peninsula,” said Liu Dongliang, a Shenzhen-based foreign-exchange analyst at China Merchants Bank Co., the country’s sixth-largest lender by market value. “But the yuan still has a chance to break through 6.6 by the end of this year because of the big trade surplus.”
The yuan retreated 0.11 percent to 6.6681 per dollar as of 10:35 a.m. in Shanghai, according to the China Foreign Exchange Trade System. It touched 6.6770 yesterday, the weakest since Nov. 9. The currency was little changed for the month.
Twelve-month non-deliverable forwards climbed 0.09 percent to 6.5408 per dollar, reflecting bets the currency will rise 1.9 percent in a year, according to data compiled by Bloomberg.
Sumber : BLOOMBERG.COM