Yuan Under Short-term Depreciation Pressure-Yicai

The Chinese yuan is under short-term depreciation pressure, against a backdrop of unusually loose domestic liquidity, weakening Chinese economic data and as the U.S. dollar index remains at a high level, Yicai.com reported, citing an unnamed trader at a state-owned bank. The direction of the yuan will mainly be dependent on trade balance gyrations, and the currency may continue to trade sideways around current levels if exports can maintain their strong trend, the newspaper wrote, citing analysts. The yuan weakened after the PBOC’s surprise rate cut earlier this week, although it has moved away from post-cut lows, when measured against the U.S. dollar, the newspaper noted.