USD/CNY: Yuan strengthens as State banks sell USD

The Chinese currency remained on a firmer footing versus its US counterpart in the European session, sending USD/CNY lower amid reports of US dollar selling by major Chinese state-owned banks.

Reuters reports, “Traders said dollar purchases by bank clients - both companies and individuals - rose on Thursday morning, forcing state banks to sell dollars at around the 6.9555 level.”

Moreover, ongoing weakness in the US dollar against its six major rivals also collaborates to the downbeat sentiment seen around USD/CNY.

While the Yuan also stood resilient, despite a weakening of the domestic currency by the Chinese central bank. The PBOC set the USD/CNY reference rate at 6.9497, almost unchanged from Wednesday’s fix at 6.9495.

Meanwhile, the USD/CNY pair trades -0.07% lower at 6.9546 in the European session, recovering from session troughs of 6.9531.