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China’s yuan shows 64-pips weakening against US dollar on Monday
(MENAFN) On Monday, the central parity rate of the Chinese yuan, also known as the renminbi, declined by 64 pips, settling at 7.0989 against the U.S. dollar, as reported by the China Foreign Exchange Trade System. This adjustment reflects a weakening of the yuan's value in comparison to the dollar, following the daily evaluation process used by the exchange system.
In the context of China's spot foreign exchange market, the yuan is subject to fluctuations within a range of 2 percent above or below the central parity rate each trading day. This mechanism allows for a degree of variability in the currency's value, accommodating market dynamics while providing a structured framework for daily trading activities.
The central parity rate itself is determined based on a weighted average of prices provided by market makers before the interbank market opens each business day. This rate serves as a reference point for the yuan's value against the U.S. dollar and is essential for establishing the currency's position in the foreign exchange market.
The process of setting this rate involves collecting and averaging the exchange rates offered by various market participants, ensuring that the central parity rate reflects current market conditions accurately. This method helps in maintaining stability and transparency in the currency exchange process, influencing trading decisions and financial strategies.
In the context of China's spot foreign exchange market, the yuan is subject to fluctuations within a range of 2 percent above or below the central parity rate each trading day. This mechanism allows for a degree of variability in the currency's value, accommodating market dynamics while providing a structured framework for daily trading activities.
The central parity rate itself is determined based on a weighted average of prices provided by market makers before the interbank market opens each business day. This rate serves as a reference point for the yuan's value against the U.S. dollar and is essential for establishing the currency's position in the foreign exchange market.
The process of setting this rate involves collecting and averaging the exchange rates offered by various market participants, ensuring that the central parity rate reflects current market conditions accurately. This method helps in maintaining stability and transparency in the currency exchange process, influencing trading decisions and financial strategies.
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