HONG KONG Jan 5 China's onshore yuan
and its offshore counterpart rose sharply in early
afternoon trade on Thursday, with some traders saying European
players were squaring short yuan positions as funding costs
The onshore yuan market was quiet in the morning, but later
rose to 6.8875 per dollar, the strongest in almost a month.
The offshore yuan also surged to 6.8072 per dollar,
the strongest since Nov. 11. That compared to its Asia open at
Traders say that tight liquidity and surging funding costs
in the offshore yuan market have forced yuan short sellers to
square positions and stop losses.
China has stepped into both its onshore and offshore yuan
markets to shore up the faltering yuan this week, sparking
speculation that it wants a firm grip on the currency ahead of
U.S. President-elect Donald Trump's inauguration later this
(Reporting by Michelle Chen; Editing by Kim Coghill)