SHANGHAI: China 's yuan firmed against the US dollar on Friday after the central bank set a stronger midpoint, with the Chinese currency on course for a winning week.Prior to market opening, the People's Bank of China set the midpoint rate at 6.7774 per dollar, its strongest in nearly two weeks, firmer than the previous fix of 6.7802.In the spot market, the yuan opened at 6.7801 per dollar and was changing hands at 6.7814 at midday, 34 pips firmer than the previous late session close but 0.06 per cent weaker than the midpoint.If the yuan finishes the day at the current level, it will have strengthened nearly 0.4 per cent against the dollar for the week, compared with a 0.4 per cent loss in the previous one.The spot yuan was trading within a thin range of less than 50 pips in morning trade with daily volume shrinking to $8.811 billion as of midday. The full-day trading volume on Thursday stood at $28.525 billion.A trader at a Chinese bank, who expected the yuan to trade between 6.78 and 6.82 per dollar in the near term, said that as the spot rate moves closer to the firmer side of the range, willingness by some companies to liquidate their dollar positions may rise.However, July is a traditional period for high corporate dollar demand.A trader at a Chinese bank in Shanghai said dollar demand by oil firms may rise soon as these firms usually purchase dollars for their business in the middle of a month.The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.46, firmer than the previous day's 94.44.The global dollar index fell to 95.719 from the previous close of 95.728.The offshore yuan was trading 0.02 per cent weaker than the onshore spot at 6.7828 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 6.9215, 2.08 per cent weaker than the midpoint.

Source: Economic Times July 14, 2017 05:15 UTC