MNI CHINA MARKETS: Yuan Weaker; Rates Lower; SH Shares Up

     BEIJING (MNI) - The Chinese yuan fell to 6.3420 against the U.S. dollar on

Thursday from yesterday's 6.3335 closing, following today's weaker fixing.  

     PBOC set the yuan central parity rate vs the U.S. dollar at 6.3352, weaker

than Wednesday's 6.3294.

***COMMENT: Yuan's fixing continues to be impacted by the strength of the

dollar. The dollar rose after Federal Reserve Chair Jerome Powell's

congressional testimony raised the expectation that benchmark interest rate may

be hiked as many as four times this year.

     Interbank market rates declined. PBOC injected CNY150 billion by Open

Market Operations on Thursday, resulting in a net drain of CNY10 billion after

the maturities of CNY160 billion in reverse repos.

  - 7-day repo average fell to 2.8418% from the 2.9965% yesterday 

  - Overnight repo average was 2.6684%, down from 2.7466% yesterday. 

     Yield on 10-year China Government Bond last traded 3.8300%, down from the

3.8350% close yesterday: Wind Information.

The Shanghai Composite Index rose 0.60% to 3279.08 at the 11:30 trading break,

while Hang Seng Index was last at 30,914.45, up 0.23%.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: M$A$$$,M$Q$$$,M$$FI$,MN$FI$,MN$FX$]