Yuan rises as companies step up dollar selling after bounce

China’s yuan edged up against the US dollar on Tuesday as companies continued to sell dollars and lock in profits after the greenback hit a threemonth high.

The People’s Bank of China, the country’s central bank, set the midpoint rate at 6.3229 per dollar prior to market opening, 0.3 percent weaker than the previous fix of 6.3034.

The move in Tuesday’s official guidance rate was the biggest one-day weakening in percentage terms since March 29.

For a second straight day, corporate dollar selling remained stronger than demand for the greenback, pushing the spot yuan rate higher, traders said.

A trader at a Chinese bank in Shanghai said Tuesday’s much weakened midpoint triggered more selling interest in greenback, while expecting the yuan to trade in a slightly wider range of 6.25 to 6.35 per dollar in the near term.

In global markets, the dollar set a three-month high against a basket of currencies on Tuesday, having gained a boost as the US 10-year Treasury yield climbed toward the psychologically key 3 percent level.

The global dollar index rose to as high as 91.054 in early Asian trade, its strongest level since January 12, before trading around 90.87.

The offshore yuan was trading 0.03 percent stronger than the onshore spot at 6.3114 per dollar.