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(Z1) Still Climbing

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(Z1) Needle Still Points North

     BEIJING (MNI) - The yuan strengthened against the U.S. dollar on Wednesday
morning after the People's Bank of China set a stronger fixing for the day and
the U.S. dollar index weakened.
     The yuan was last at 6.5965 against the U.S. unit, stronger than the
official closing price of 6.6075 on Tuesday. The yuan rose as high as 6.5958
against the U.S dollar in interday trading, the highest since Nov. 29. 
     The dollar index fell 0.02% this morning to 93.44. Traders told MNI the
dollar is losing its strong momentum as market participants have started to
close their dollar positions before the tax cut vote in the United States. 
     The People's Bank of China set the yuan central parity rate against the
U.S. dollar at 6.6066 on Wednesday, stronger than Tuesday's 6.6098. The PBOC has
set the fixing stronger for two straight trading days.
     Money market rates were down after the PBOC injected a net CNY10 billion
into the banking system via open-market operations. The seven-day repo average
was last at 2.8041%, lower than Tuesday's average of 2.9024%. The overnight repo
average was at 2.6912%, also lower than Tuesday's 2.7247%.
     The yield on benchmark 10-year China government bonds was last at 3.9200%,
up from the previous close of 3.9000%, according to Wind, a financial data
provider. 
     Mainland stocks were flat, with the technology sector taking the heaviest
losses in the morning session. The benchmark Shanghai Composite Index was at
3,295.58. Hong Kong's Hang Seng Index was 0.05% higher at 29,267.75
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com
[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]