THE yuan edged up against the U.S. dollar yesterday, as weaker-than-expected U.S. jobs data and persistent worries about a trade dispute between China and the United States weighed on the greenback. The dollar steadied in the Asian session, having retreated late last week due to concerns trade tensions and following data that showed the U.S. economy created the fewest jobs in six months in March. But while trade Sino-U.S. frictions have been bearish for the dollar in recent trading sessions, analysts expect they could hit sentiment toward the yuan harder in the longer term. The latest Reuters poll of nearly 70 foreign exchange strategists conducted April 3-6 showed that the yuan was expected to shrug off some of the gains it booked so far this year and fall 0.8 percent to 6.35 per U.S. dollar in a year. Yesterday’s official guidance rate was the weakest since March 26. In the spot market, the onshore yuan opened at 6.3005 per dollar and was changing hands at 6.2962 at midday, 65 pips firmer than the previous late session close. China’s swift retaliation against the United States’ proposed tariffs last week soured the mood and hit market sentiment toward the yuan. While sentiment has recovered slightly since then, a trader at a Chinese bank in Shanghai said the market remained cautious and expects the yuan to trade around 6.3 per dollar level in near term. Tommy Xie, an economist at OCBC Bank in Singapore, also said the yuan’s recent movements hinge on market expectation on China’s possible reaction to the trade tension. “If China is likely to compromise, the yuan may appreciate. However, if China decides to fight to the end, the yuan may depreciate,” Xie said in a note. Market participants have now switched their attention to Chinese President Xi Jinping’s keynote speech at Boao Forum for Asia today, where he is expected to unveil fresh market-opening measures. (SD-Agencies) |