Yuan edges up as U.S. eases restrictions on Huawei

Yuan edges up as U.S. eases restrictions on Huawei

21 May 2019 10:51 AM

China's yuan firmed against the dollar on Tuesday, as sentiment improved slightly after Washington temporarily eased restrictions on Huawei, while a firmer-than-expected official midpoint discouraged bets against the renminbi.

The U.S. government on Monday allowed Huawei Technologies Co Ltd to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets until Aug. 19.

The U.S. move eased some worries that Sino-U.S. trade tensions would be further inflamed and inflict deeper losses on the Chinese currency.

Prior to market opening, the People's Bank of China (PBOC) lowered the midpoint rate for a ninth straight day to a fresh nearly five-month low of 6.8990 per dollar.

The firmer-than-expected official guidance rate suggested the authorities might be uncomfortable with the yuan's rapid slide and aimed to slow its depreciation.

In the spot market, onshore yuan opened at 6.9094 per dollar and was changing hands at 6.9024 at midday, 109 pips firmer than the previous late session close and 0.05% softer than the midpoint.

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