USDX Falls Below 90 Basis Points; Yuan-Dollar Central Parity Drops Under 6.4
Xu Wei
DATE:  Jan 24 2018
/ SOURCE:  Yicai
USDX Falls Below 90 Basis Points; Yuan-Dollar Central Parity Drops Under 6.4 USDX Falls Below 90 Basis Points; Yuan-Dollar Central Parity Drops Under 6.4

(Yicai Global) Jan. 24 -- For the first time in three years, the US Dollar Index (USDX) has fallen below 90 basis points, boosting the yuan-dollar central parity rate over 6.4 for the first time in 25 months.

The central parity rate is 6.3916, an increase of 93 basis points over the previous day, thus marking the first time that the central parity rate has risen over 6.4 since Dec. 7, 2015, show data the China Foreign Exchange Trade System (CFETS) issued on Jan. 24.

Driven by the central parity, the yuan-dollar spot exchange rate and the offshore yuan exchange rate strengthened as well. Opening at 6.3983, the spot exchange rate immediately surged to break through 6.39 to 6.3850, setting a record since Dec. 4, 2015. The offshore exchange rate rose to 6.3924.

The driver of the surging yuan exchange rate is the continuously falling USDX.

The USDX fell below 90 basis points -- the lowest price quoted at 89.9117 -- on the morning session of Asian stock markets today for the first time since Dec. 31, 2014.

The central parity rate has risen a total of 2.18 percent in 17 trading days, while the spot exchange rate and offshore exchange rates have cumulatively risen over 1.7 percent since the USDX fell 2.47 percent.

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Keywords:   USD,Yuan