September 28, 2017 / 8:58 AM / a year ago

Yuan extends losses to over 1-month low despite state bank buying

SHANGHAI, Sept 28 (Reuters) - China’s yuan extended losses against the U.S. dollar on Thursday afternoon, falling to its lowest level in over a month, amid heavy dollar demand from bank clients.

Spot yuan opened at 6.6410 and fell to 6.6770 at one point in afternoon trade, the weakest level since Aug. 18.

As of the 4:30 p.m (0830 GMT) domestic close, the yuan settled at 6.6699 per dollar.

If the yuan closes at the level in the night trading session, it would have lost 0.4 percent of its value from the previous late night close of 6.6425. And it would weakened for the fourth straight session.

Traders attributed accelerated yuan selling in the afternoon to the recent rebound in the dollar, which has spurred heavy buying from companies and households.

The greenback has rallied on revived expectations of another U.S. interest rate hike this year and hopes that U.S. President Donald Trump will be able to push through tax reforms.

Early losses in the yuan prompted major state-owned banks to sell small amounts of dollars to slow its fall on Thursday morning, traders said.

China takes the official market closing price at 4:30 p.m Shanghai time (0830 GMT) into consideration when it fixes the official guidance rate, in an effort to let market forces play a bigger role in determining the yuan’s value.

The market also has an evening session lasting until 11:30 p.m.

Reporting by Winni Zhou and John Ruwitch; Editing by Kim Coghill

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