A measure tracking 20 emerging-market currencies gained for the first time in the new year, rising 0.1 percent. The index dropped 1.6 percent this week, set for the sharpest fall since the period ended Dec. 11.
The yuan rose 0.1 percent. The People’s Bank of China (PBOC) set the daily fixing, which restricts onshore moves to a maximum 2 percent on either side, at 6.5636 a US dollar, 0.02 percent stronger than the previous day’s reference rate. It was cut 1.42 percent over the last eight days.
“The PBOC may have been surprised how badly China and global stock markets reacted to yuan depreciation,” Singapore-based Barclays PLC foreign-exchange strategist Dennis Tan said. “They may want to keep the yuan stable for a while to help calm the stock market.”
The New Taiwan dollar rose NT$0.029 on Friday to 33.501, compared with NT$33.066 on Dec. 31.
South Africa’s rand ended a five-day decline, while Malaysia’s ringgit rose 0.4 percent and Turkey’s lira strengthened for a second day.
The Mexican peso advanced for the first time in six days by 0.3 percent. The central bank sold US$400 million to support the currency after it fell to a record low on Thursday.
The decline in the yuan threatens to spark a cycle of competitive devaluations of currencies, Mexican Minister of Finance Luis Videgaray said.
The won rose for the first time this year, paring its worst weekly drop in three months, as traders judged its declines after North Korea’s nuclear test and a rout in Chinese market to be excessive.
China’s government bonds rose, pushing the 10-year yield to its lowest level in more than a week, as the selloff in equities boosted their safe haven appeal.
The yield on notes due in October 2025 fell five basis points to 2.83 percent, the lowest since its close on Dec. 29.
The yield has declined nine basis points in the past two days, taking its drop this week to three basis points.
Sovereign notes in South Korea fell, pushing up the yield on government debt maturing December 2025 by four basis points to 2.06 percent.
The yield has fallen one basis point this week.
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