RMB Weakens As Traders Focus On U.S. Payrolls

The onshore yuan weakened to 6.7218 per dollar on Wednesday, down 20 pips from the previous 4:30 PM close and its lowest level since August 25, according to ETNet. It traded between 6.7192 and 6.7228 during the session. The offshore yuan fell 58 pips to 6.7238, while the daily midpoint was set at 6.7809, up 19 pips and the strongest since August 20, though still about 640 pips weaker than market expectations. Market participants said investors are gradually digesting Federal Reserve Chair Jerome Powell's hawkish remarks and are turning their attention to this week's U.S. nonfarm payrolls data. A foreign bank trader said the dollar-yuan pair is likely to trade around 6.72 for now. China Merchants Bank's financial markets team said Powell's comments have helped restore expectations for Fed rate hikes and support a short-term rebound in the dollar, but U.S. fiscal deficits, asset risk premiums and political pressure from the midterm elections still point to downside pressure on the dollar over the medium term.