(Yicai Global) Feb. 28 -- The yuan started the day stronger against the dollar this morning, despite China's official purchasing managers' index showing the nation's manufacturing sector contracted for the third straight month in February.
The onshore yuan spot rate opened at 6.6844, slightly better than yesterday evening's 6.6855 close. The offshore spot exchange rate was 6.6799 this morning.
The National Bureau of Statistics published the world's second largest economy's PMI data just before the markets opened, showing the manufacturing index slid 0.3 point in February to an almost three year low and the non-manufacturing business activity index fell 0.4 point to 54.3. The index is a survey of businesses in a specific industry about the operating environment. A reading above 50 signals expansion in the sector, while one below 50 represents contraction.
China's central bank set the central parity rate between the two currencies at 6.6901 today, 44 bips weaker than yesterday and marking the first time since Feb. 18 that the People's Bank of China has depreciated the redback against the dollar.
In the Chinese forex market, spot trades must value the yuan at 2 percent above or below the day's central parity rate.