SHANGHAI, Sept 4 (Reuters) - The yuan inched up on Friday and looked set for a sixth week of gains, its longest winning streak since early 2018, buoyed by broad dollar weakness. Investors are now shifting their attention to key U.S. jobs data due later on Friday to gauge the pace of recovery in the world's largest economy from the pandemic, which could spark volatility in the greenback and major currencies. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8359 per dollar, the first weakening in nine days, 40 pips or 0.06% softer than the previous fix of 6.8319. In the spot market, onshore yuan opened at 6.8402 per dollar and was changing hands at 6.8416 at midday, 54 pips firmer than the previous late session close. The spot price hit a 16-month peak of 6.81 per dollar earlier this week, but pared some of its gains after the dollar managed to regain its footing. But still, the Chinese currency is up 0.34% against the dollar for the week. "There may be a consolidation period (for the yuan) in the near term as the DXY downtrend seems to be coming to a pause," said Frances Cheung, head of macro strategy for Asia at Westpac. "But beyond these short-term dynamics, fundamentals remain supportive of the CNY, in particular the prospect of more flows into bonds, yield differentials and growth outperformance." Economists at Morgan Stanley also said continued capital inflows should support the yuan and they expected the currency to trade at 6.6 per dollar by end-2021. ING, joining other global investment banks in revising up forecasts and betting the recent rally will be sustained, now sees the Chinese currency trading at 6.7 per dollar at the end of this year from the previous forecast of 6.97. The global dollar index traded at 92.796 at midday, when the offshore yuan was trading at 6.8461 per dollar. The yuan market at 4:03AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.8359 6.8319 -0.06% Spot yuan 6.8416 6.847 0.08% Divergence from 0.08% midpoint* Spot change YTD 1.78% Spot change since 2005 20.97% revaluation Key indexes: Item Current Previous Change Thomson 93.18 93.33 -0.2 Reuters/HKEX CNH index Dollar index 92.796 92.837 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.8461 -0.07% * Offshore 7.0024 -2.38% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Winni Zhou and Andrew Galbraith; Editing by Jacqueline Wong)
Our Standards: The Thomson Reuters Trust Principles.