The Chinese yuan weakened against the U.S. dollar in the Asian session on Wednesday after data showed that activity in China’s factory sector fell to a six-and-a-half year low in September.
Data from Caixin showed that the manufacturing sector in China continued to contract in September and at a faster rate, with a 78-month low PMI score of 47.0. That was shy of forecasts for 47.5 and down from 47.3 in August, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. In all, the manufacturing PMI has contracted for seven straight months.
Against the greenback, the yuan fell to nearly a 2-week low of 6.3833 from yesterday’s closing value of 6.3750.
If the yuan extends its downtrend, it is likely to find support around the 6.43 area.
The People Bank of China set today’s central parity rate for yuan at 6.3773 per dollar, compared to Tuesday’s reference rate of 6.3721. 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