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China yuan ends on technical demand

SHANGHAI: China's yuan closed slightly higher in thin trade on Wednesday due to light technical buying by local banks, dealers said.

The yuan finished at 8.2797 to one US dollar against 8.2800 on Tuesday after moving in a narrow range of 8.2789 and 8.2801.

The yuan had been on a slight downward trend in the previous few weeks mainly due to increased dollar demand at the end of the year.

"Light technical buying from local banks after the recent falls pushed the yuan up slightly today," said a dealer at a foreign bank.

Despite the gains, dealers said market fundamentals had not changed and the room for the yuan to rise further was limited.

The market saw a foreign exchange outflow in December due to increased dollar demand from local banks for year-end settlement and from foreign companies sending home their 1999 profits.

But the outflow was largely offset by China's strong foreign trade surplus, which was estimated at $30 billion in 1999.

The yuan was likely to move in a narrow range between 8.2790 and 8.2800 in the near term, dealers said.

The yuan closed higher against the Japanese yen at 8.0332 to 100 yen against 8.0710 on Tuesday.

It ended slightly higher against the Hong Kong dollar at 1.0640 to HK$1.0 against 1.0644.-Reuters