Yuan slightly up

The yuan closed up slightly against the dollar on Wednesday and appeared to be set for a new leg of measured appreciation after the People's Bank of China fixed its mid-point near a record high for the second day. The PBOC set the day's mid-point against the dollar, from which the yuan can rise or fall 0.5 percent in a given day, at 6.6247, up slightly from Tuesday's 6.6252 and just shy of a record high of 6.6239 on November 12.
But the central bank appeared reluctant to let the yuan rise too fast, amid the threat of speculative capital inflows seeking returns on higher interest rates and expectations of yuan appreciation, and that attitude prevented it from letting the yuan's mid-point breach its record on Wednesday, traders said. Spot yuan finished at 6.6212 per dollar, up from Tuesday's close of 6.6248 and now only 39 pips away from the record high of 6.6173 hit on November 11. Offshore, one-year non-deliverable dollar/yuan forwards were bid at 6.4730 in late trade, down slightly from Tuesday's close of 6.4800. The implied yuan appreciation in a year's time edged up to 2.34 percent from 2.23 percent.