On Friday, the onshore yuan closed at 6.9720 against the U.S. dollar, slipping by 40 basis points from the previous session. The move reflects modest downward pressure on the Chinese currency amid cautious market sentiment.
Stable Trading Amid Narrow Fluctuations
Despite the decline, the overall market remained calm, with trading volume totaling $44.29 billion—close to recent averages. This suggests investors are adopting a wait-and-see approach.
Analysts attribute the slight weakening to a stabilized U.S. dollar index and shifts in cross-border capital flows, rather than any major structural change.
Next Moves Hinge on Economic Fundamentals
- Market attention is turning to upcoming indicators like China's manufacturing PMI and U.S. nonfarm payrolls
- A stronger-than-expected domestic recovery could provide support for the yuan
- Diverging monetary policy paths between the Fed and PBOC remain a key driver
Experts suggest the yuan may trade sideways between 6.95 and 7.00 in the near term, urging businesses to hedge currency exposure prudently.