Dollar key to yuan direction

The direction of the yuan this week will again depend on the performance of the United States dollar and the foreign exchange market is not expected to see major changes which could cause the Chinese currency to move abruptly.



The yuan ended little changed last week, closing at 6.8350 against the greenback on Friday, versus 6.8333 a week earlier, according to the China Foreign Exchange Trade System.



Tommy Xie, an OCBC Bank economist, said he didn't foresee a change in policy by the People's Bank of China, the central bank, for a weaker yuan.



Market participants said the performance of the US dollar will be a dominant factor which will influence the direction of the Chinese currency over the short term.