The Chinese yuan weakened against the U.S. dollar in the late Asian session on Friday, as traders speculate that the people’s Bank of China is letting the currency to depreciate after yuan was included in the International Monetary Fund’s Special Drawing Rights basket.
Against the greenback, the yuan fell to nearly a 4-1/2-year low of 6.4535 from an early high of 6.4363. At yesterday’s close, the yuan was trading at 6.4162 against the greenback.
If the yuan extends its downtrend, it is likely to find support around the 6.50 area.
The People Bank of China set today’s central parity rate for yuan at 6.4358 per dollar, compared to Thursday’s reference rate of 6.4236. The central bank sets the reference rate every morning and allows the currency to move upto 2 percent from that level.
The material has been provided by InstaForex Company – www.instaforex.com