China's yuan fell against the dollar on Friday, with traders saying there was little evidence of strong dollar supply even after Beijing posted a second month of trade surpluses in June.
The yuan slipped for a second day in a row and has mostly underperformed the official midpoint fixing during the week.
Spot yuan eased to 6.2078 per dollar by midday, 0.08 per cent weaker than Thursday's close.
In comparison, the People's Bank of China (PBOC) fixed its official midpoint at 6.1469, down 0.04 per cent from Thursday's fixing.
China's trade performance improved in May and June, leaving a trade surplus of $31.6 billion in June alone.
However, the PBOC's foreign exchange assets, which mainly reflect its dollar purchases and sales on the yuan market, rose a mere 361 million yuan ($58.21 million) in May, the lowest growth since July last year, central bank data published this week showed.
"The big difference between the PBOC's foreign exchange asset data and the trade surplus data means banks and their clients are holding a large amount of dollars on hand, resulting in much less dollar supply of late," said a trader from a Chinese commercial bank in Shanghai. .
The yuan slipped for a second day in a row and has mostly underperformed the official midpoint fixing during the week.
Spot yuan eased to 6.2078 per dollar by midday, 0.08 per cent weaker than Thursday's close.
In comparison, the People's Bank of China (PBOC) fixed its official midpoint at 6.1469, down 0.04 per cent from Thursday's fixing.
China's trade performance improved in May and June, leaving a trade surplus of $31.6 billion in June alone.
However, the PBOC's foreign exchange assets, which mainly reflect its dollar purchases and sales on the yuan market, rose a mere 361 million yuan ($58.21 million) in May, the lowest growth since July last year, central bank data published this week showed.
"The big difference between the PBOC's foreign exchange asset data and the trade surplus data means banks and their clients are holding a large amount of dollars on hand, resulting in much less dollar supply of late," said a trader from a Chinese commercial bank in Shanghai. .
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