Appetite for yuan weakens as appreciation ends

On Thursday, the yuan closed 0.06 percent lower than Wednesday at 6.2130, amid a 0.04 percent drop in the daily reference rate to 6.1465.

Gao Ting, UBS Securities AG's chief China strategist, told reporters on Wednesday that the yuan's depreciation is temporary.

"The yuan will stabilize after a while. There are no fundamentals to support a sustained depreciation," said Gao.

UBS has forecast that the yuan will trade at 6.1 at the end of this year.

According to SWIFT, yuan payments surged in Australia in February, rising 248 percent from a year earlier and placing Australia sixth for yuan payments by value. That ranking excludes the Chinese mainland and the Hong Kong Special Administrative Region.

In February, 14.2 percent of payments between Australia and the Chinese mainland/Hong Kong SAR were in renminbi, compared with 7.7 percent and 1.9 percent in 2013 and 2012, respectively.

Bill Doran, head of Oceania for SWIFT, said in a statement that about 98 percent of the payments were institutional.

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