The yuan closed lower against the dollar on Tuesday after the People's Bank of China set a slightly weaker mid-point to take into account the global dollar rally overnight. The pullback came after the PBOC engineered a series of record highs for the yuan this year, partly because a generally weakening dollar has helped send global commodity prices surging, boosting imported inflation for China, the world's fastest growing market for staple goods.
Spot yuan closed at 6.5305 against the dollar on Tuesday, down from Monday's close of 6.5287 but still within reach of its record high of 6.5276 hit in intraday trading on Monday. The currency has now appreciated 4.52 percent since it was depegged in June 2010, and 0.88 percent so far this year. Before trading began, the PBOC fixed the yuan's mid-point at 6.5346, slightly weaker than Monday's 6.5310. Offshore, one-year non-deliverable forwards were bid at 6.3800.
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