Hot Now: Yuan eases

SHANGHAI: China´s yuan weakened against the U.S. dollar on Thursday, which traders attributed to rising demand for the greenback from companies.

Prior to market opening, the People´s Bank of China set the midpoint rate at 6.7464 per dollar, near Wednesday´s nine-month high guidance of 6.7451. In the spot market, the yuan opened at 6.7580 per dollar and was changing hands at 6.7639 at midday, 113 pips weaker than the previous late session close and 0.26 percent softer than the midpoint.

Traders said companies continued to take advantage of the weaker U.S. currency by building up dollar positions, as in the past few sessions. Dollar buying may persist for several days, they said. Oil firms usually build up their dollar reserves at mid-month for their business needs, while other companies face rising dollar requirements for trade and finance purposes when the month-end approaches.

The dollar-buying has picked up with the U.S. currency´s slide over the past two weeks or so. One onshore trader at a Chinese bank in Shanghai said the weakness in the offshore yuan dragged the onshore spot down further. "Some overseas market players were covering their short positions in the U.S. unit after signs showed that the dollar index may start to bottom out.