China's yuan near 1-month low, losses stemmed by Evergrande relief - Reuters

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    SHANGHAI, Sept 22 (Reuters) - China's yuan weakened to a
near one-month low against the dollar on Wednesday, the first
trading day after the Mid-Autumn Festival holiday, as some
investors caught up on a recent rally in the greenback.
    But losses were capped after heavily indebted Chinese
property giant Evergrande said it would make an bond
coupon due on Thursday, offering some relief to investors
worried about a possible default.
    Prior to market opening, the People's Bank of China (PBOC)
set the midpoint rate at 6.4693 per dollar, 166 pips,
or 0.26%, softer than the previous fix of 6.4527, and the
weakest since Aug. 27.
    In the spot market, onshore yuan opened at 6.4725
per dollar and fell to a low of 6.4737, the weakest level since
Aug. 27. By midday, it was changing hands at 6.4714, 53 pips
softer than the previous late session close.    
    Traders said the Federal Reserve's policy meeting remained
the key focus as markets were anxious about the pace of
pandemic-era stimulus withdrawal, which could bring volatility
to major currencies.
    Li Liuyang, chief FX analyst at China Merchants Bank, said
the wording around inflation in the Fed's post-meeting
statement, changes to "dot plot" and Chair Jerome Powell's
comments on employment could all affect market sentiment.
    "If market expectations for Fed tightening and rate hike
change after the September meeting, the dollar was likely to
climb higher," Li said, referring to an earlier tightening than
market predicted.
    Separately, China stood pat on its benchmark lending rate
for corporate and household loans, as expected, but analysts saw
chances for an imminent rate cut to prop up the
economy.
    "With the economy losing steam and concerns around the
property sector growing, we think policy rate cuts by the PBOC
could come as soon as next month," said Julian Evans-Pritchard,
senior China economist at Capital Economics.
    By midday, the global dollar index rose to 93.27 from
the previous close of 93.222, while the offshore yuan
was trading at 6.475 per dollar. 
    
    The yuan market at 0400 GMT: 
    
    ONSHORE SPOT:
 Item               Current  Previous  Change
 PBOC midpoint      6.4693   6.4527    -0.26%
                                       
 Spot yuan          6.4714   6.4661    -0.08%
                                       
 Divergence from    0.03%              
 midpoint*                             
 Spot change YTD                       0.88%
 Spot change since 2005                27.89%
 revaluation                           
 
    Key indexes:
     
 Item            Current     Previous  Change
                                       
 Thomson         98.95       98.9      0.1
 Reuters/HKEX                          
 CNH index                             
 Dollar index    93.27       93.222    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    6.475     -0.06%
        *                        
 Offshore              6.6521    -2.75%
 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 Winni Zhou and Andrew Galbraith; Editing by Sam
Holmes)
  

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