The yuan closed slightly lower versus the dollar on Friday after the People's Bank of China set a weaker mid-point, in line with a rebound in the dollar after the US narrowly escaped a disastrous debt default. Dealers said the central bank would like to guide two-way movements of its currency by fixing a weaker mid-point now and then to ward off risks from one-sided betting on yuan appreciation, although the currency's ascending path was likely to stay unchanged.
Spot yuan closed at 6.4404, weaker than Thursday's close of 6.4390. It has now appreciated 6.0 percent since it was depegged from the dollar in June 2010 and 2.32 percent so far this year. Before trade began the PBOC fixed the yuan's mid-point at 6.4451 against the dollar, weaker than Thursday's record high of 6.4386. Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3880 in late trade, weaker than 6.3690 at the previous day's close. Their implied yuan appreciation in a year's time fell to 0.89 percent from 1.09 percent.
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