The yuan ended little changed against the dollar on Friday, after the People's Bank of China kept the currency relatively stable and the yuan is expected to push higher after next week's US-China economic dialogue. Spot yuan closed at 6.4938 versus the dollar at midday, almost flat from Thursday's close of 6.4937.
Before trade began, the PBOC set the yuan's daily mid-point at 6.5003 against the dollar, slightly firmer than Thursday's 6.5025. The central bank uses the mid-point to express the governments' intention for the yuan's movements. Traders said the market widely expects the central bank to set the mid-point even higher after the dollar index jumped 1.6 percent on Thursday and held around those levels on Friday.
The yuan has now appreciated 5.1 percent since it was depegged from the dollar in June 2010, and 1.5 percent since the start of this year. Offshore, one-year non-deliverable forwards (NDFs) were bid at 6.3530 late on Friday, up slightly from 6.3450 at the previous close. Their implied yuan appreciation in a year's time fell to 2.3 percent from 2.4 percent.
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