Yuan strengthens

SHANGHAI: China´s yuan inched up against the U.S. dollar on Monday, as a much weakened official yuan midpoint prompted corporate dollar selling to prevent the yuan breaching a key threshold, traders said.

Prior to the market opening on Monday, the People´s Bank of China set the midpoint rate at 6.3034 per dollar, 137 pips or 0.2 percent weaker than the previous fix of 6.2897 on Friday. Monday´s official guidance rate, the weakest since April 10, reflected the dollar´s movement overnight in global markets on rising U.S. bond yields.

The dollar traded near a two-week high against a basket of major currencies, with the dollar index trading at 90.397 as of midday, compared with the milestone of 90.477 hit on Friday. In the spot market, the onshore yuan opened at 6.2957 per dollar and was changing hands at 6.2943 at midday, 33 pips firmer than the previous late session close and 0.14 percent stronger than the midpoint.