The Chinese yuan inched against the U.S. dollar on Wednesday in Asia after Beijing scrapped foreign quota to permit unfettered usage of the stock markets.
The USD/CNY pair inched up 0.1% to 7.1176 by 12:15 AM ET (04:15 GMT).
China’s State Administration of FOREX said inside a statement on Wednesday that it could remove quota restrictions around the dollar-dominated qualified foreign institutional investor scheme and RQFII, a programme introduced in 2011 that provides investors usage of offshore renminbi to get mainland-traded stocks.
Beijing said the move would “ensure it is a lot more convenient for overseas investors to take part in China’s domestic financial markets, making China’s bond and stock markets more broadly accepted by international markets.”
China in January doubled the QFII quota to $300 billion. In accordance with CNBC, only $111.4 billion from the limit have been utilised by foreign investors up to now.
Within an interview with CNBC, CLSA Chief Economist Eric Fishwick said he believes the yuan could weaken further because the Sino-U.S. trade war drags on.
“Looking at the way the currency trades, it's very clearly demonstrated that it's being used in an effort to offset the consequences of tariffs,” Fishwick told CNBC. “So, the yuan is permitted to weaken whenever the U.S. ratchets the tensions higher,” he said, noting he thinks the yuan could reach around 7.3 per dollar by the finish of 2019.
The GBP/USD pair inched up 0.1% to at least one 1.2353. The pound traded slightly lower early in the day following the U.K. employment report for July showed solid wage growth and hook reduction in the unemployment rate.
The USD/JPY pair rose 0.2% to 107.71.
The AUD/USD pair, as well as the NZD/USD pair, inched up 0.1% to 0.6862.
THE UNITED STATES Dollar Index that tracks the greenback against a basket of other currencies was unchanged at 98.308. Without a directional driver, data from your Labor Department showed overnight that job openings slipped by 31,000 to some seasonally adjusted 7.2 million in July.