The yuan closed up against the dollar on Thursday, touching a record trading high intraday, after the People's Bank of China set a record high mid-point in a clear sign that the government is willing to let the Chinese currency appreciate at least in the near term.
Spot yuan closed at 6.5871 to the dollar, up from Wednesday's close of 6.5885. It has now risen 3.65 percent since its depegging from the dollar in June 2010. Intraday, it touched a record trading high of 6.5800 - the same as the PBOC-fixed daily mid-point, compared with Wednesday's PBOC fixing of 6.5855. The mid-point, from which the yuan can trade up or down a maximum 0.5 percent in a given day, is the tool the central bank uses to express the government's intentions for the currency.
Offshore, dollar/yuan offshore forwards rose slightly on Thursday to imply less yuan appreciation after US Federal Reserve officials raised their forecasts for economic growth. Benchmark one-year dollar/yuan non-deliverable forwards were bid at 6.4210 late on Thursday versus 6.4130 at Wednesday's close.
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