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China's yuan left in limbo as Evergrande woes linger

    SHANGHAI, Sept 24 (Reuters) - The yuan was a tad weaker on
Friday, and while the Chinese currency has has barely reacted to
fears that property giant China Evergrande Group could
default, traders were watching anxiously after an interest
payment deadline expired. 
     "Fear of large negative spillover effects from the property
sector into financials and the real economy has triggered a
sell-off in global markets and put pressure on risk assets,
including Asian currencies," said Khoon Goh, head of Asia
research at ANZ.
    "We believe the authorities will want to ensure that
volatility in the exchange rate is minimised. We still see the
yuan as undervalued at current levels, and see scope for further
gains once the Evergrande concerns ease."
    The People's Bank of China set the midpoint rate
at 6.4599 per dollar prior to market open, firmer than the
previous fix of 6.4749. 
    In the spot market, the yuan opened at 6.4600 per
dollar and was changing hands at 6.4610 at midday, 10 pips
weaker than the previous late session close.
    The global dollar index stayed flat at 93.104 from
the previous close of 93.104,while the offshore yuan
was trading at 6.4626 per dollar. 


    The yuan market at 0427 GMT: 
    
    ONSHORE SPOT:
 Item               Current  Previous  Change
 PBOC midpoint      6.4599   6.4749    0.23%
                                       
 Spot yuan          6.461    6.46      -0.02%
                                       
 Divergence from    0.02%              
 midpoint*                             
 Spot change YTD                       1.04%
 Spot change since 2005                28.10%
 revaluation                           
 
    Key indexes:
     
 Item            Current     Previous  Change
                                       
 Thomson         99.11       99.1      0.0
 Reuters/HKEX                          
 CNH index                             
 Dollar index    93.104      93.104    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    6.4626    -0.02%
        *                        
 Offshore              6.6446    -2.78%
 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 Jason Xue and Andrew Galbraith; Editing by Simon
Cameron-Moore)
  
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