for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Yuan steady as market awaits U.S. election

    SHANGHAI, Nov 3 (Reuters) - China's yuan barely moved on
Tuesday as market participants held their breath for the U.S.
presidential election. 
    Prior to market open, the People's Bank of China set the
midpoint rate at 6.6957 per dollar, 93 pips firmer
than the previous fix of 6.705. 
    The spot market opened at 6.6834 per dollar and
was changing hands at 6.6916 at midday, 1 pip weaker than the
previous late session close.  
    Traders said they did not intend to bet on the outcome of
the U.S. election given the high level of uncertainty. 
    "It's really difficult to predict the election, and for the
medium term we are optimistic about the yuan," said a trader at
a Chinese bank. 
    USDCNH is the cleanest directional Asia FX expression in
differentiating between a Biden presidency (USDCNH lower on more
predictable foreign policy vis-à-vis China) and the Trump status
quo (USDCNH higher on short-covering anticipating more hawkish
foreign policy), Stephen Innes, chief global market strategist
at Axi, said in a note. 
    The U.S. dollar hovered near a one-month high on Tuesday as
investors opted for caution in the hours ahead of polls opening
on election day in the United States. 
    Opinion polls have consistently showed Democrat challenger
Joe Biden leading President Donald Trump. Analysts said a Biden
win could weaken the dollar as he intends to spend big on
stimulus, while a steadier foreign policy could lift
trade-exposed currencies.
    Trump and Biden made a last-ditch push for votes in
battleground states on Monday as their campaigns prepared for
post-election disputes that could prolong a divisive
presidential election. 
    The Thomson Reuters/HKEX Global CNH index, which
tracks the offshore yuan against a basket of currencies on a
daily basis, stood at 95.49, firmer than the previous day's
95.46. 
    The global dollar index fell to 93.966 from the
previous close of 94.036. 
    The offshore yuan was trading at 6.6906 per dollar.
    Offshore one-year non-deliverable forwards contracts
(NDFs), considered the best available proxy for
forward-looking market expectations of the yuan's value, traded
at 6.8558, -2.34 percent away from the midpoint.
    One-year NDFs are settled against the midpoint, not the spot
rate.


    The yuan market at 3:39AM GMT: 
    
    ONSHORE SPOT:
 Item               Current  Previous  Change
 PBOC midpoint      6.6957   6.705     0.14%
                                       
 Spot yuan          6.6916   6.6915    0.00%
                                       
 Divergence from    -0.06%             
 midpoint*                             
 Spot change YTD                       4.06%
 Spot change since 2005                23.68%
 revaluation                           
 
    Key indexes:
     
 Item            Current     Previous  Change
                                       
 Thomson         95.49       95.46     0.0
 Reuters/HKEX                          
 CNH index                             
 Dollar index    93.966      94.036    -0.1
 
    
    
*Divergence of the dollar/yuan exchange rate. Negative number
indicates that spot yuan is trading stronger than the midpoint.
The People's Bank of China (PBOC) allows the exchange rate to
rise or fall 2% from official midpoint rate it sets each
morning.

    OFFSHORE CNH MARKET   
  
 Instrument            Current   Difference
                                 from onshore
 Offshore spot yuan    6.6906    0.01%
        *                        
 Offshore              6.8558    -2.34%
 non-deliverable                 
 forwards                        
               **                
 
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint,
since non-deliverable forwards are settled against the midpoint.
. 

 (Reporting by Luoyan Liu, Jindong Zhang and Andrew Galbraith;
editing by Richard Pullin)
  
for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up