Yuan slips below 6.6 per dollar on weaker midpoint

China’s yuan slipped below a key threshold against the US dollar on Tuesday, in the wake of a weaker official midpoint and higher corporate demand for the greenback.

Prior to Tuesday’s market opening, the People’s Bank of China, the country’s central bank, set its midpoint for trading at 6.5883 per dollar, 44 pips or 0.07 percent weaker than the previous fix of 6.5839.

The weakness in the official fixing reflected the dollar’s gains overnight in global markets. The spot yuan breached the 6.6 per dollar mark for the first time in a week.

The onshore yuan opened at 6.5898 per dollar and was changing hands at 6.6091 during the afternoon trading, 0.29 percent weaker than the previous late session close. The offshore yuan was traded at around 6.6044 per dollar, 0.32 percent softer than the previous close.

Traders said bank clients’ dollar buying picked up, dragging the spot yuan lower on Tuesday morning. But they expect it to stabilize around the current level in the near term.

Market participants’ trading in their own accounts was marginal ahead of the key meeting, which is set to kick off on Wednesday.

During the meeting, authorities are likely to push for stability in the exchange rate.

“Unquestionably, the market is sitting tight while keeping eyes peeled and ears to the ground for any groundbreaking policy shift” to come from the meeting, Stephen Innes, head of Asia-Pacific trading at OANDA, said in a note.

Investors were also awaiting China’s third-quarter GDP growth data, due on Thursday.