Offshore yuan forwards on Tuesday were little changed and would unlikely move much this week, with dealers doubting sharp gains in the renminbi in January would continue beyond this week's political fanfare in Washington. Spot yuan hit an intraday high of 6.5824 per dollar, the strongest since being de-pegged from the dollar in July 2005, after China's central bank set the daily mid-point for the yuan at a record high of 6.5891, up from Monday's 6.5897.
The yuan has rise 3.70 percent since its June depegging. Traders of non-deliverable forwards though were reluctant to put on fresh positions during Chinese President Hu Jintao's trip to Washington that begins on Tuesday. One-year dollar/yuan NDFs were bid at 6.4490 late on Tuesday, down slightly from Monday's close of 6.4640. Their implied yuan appreciation in a year's time rose slightly to 2.17 percent from Monday's 1.94 percent. At current levels, implied appreciation priced via one-year NDFs are tiny, far below a Reuters poll of more than 5 percent in 2011.
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