The yuan edged up against the dollar on Friday as the People's Bank of China fixed a slightly stronger mid-point, guiding the Chinese currency up slightly in line with a fall in the US dollar index the day before. The yuan appears to be moving in tandem with the dollar index but confined to a narrow range as the government seems intent to keep the Chinese currency stable amid global economic weakness, mainly caused by the eurozone debt crisis.
Spot yuan closed at 6.2991 versus the dollar, compared with Thursday's close of 6.3016 after the PBOC set the yuan's mid-point slightly stronger at 6.2951 against Thursday's 6.2991. The PBOC has set the mid-point in a very narrow range this week after letting it hit an all-time high of 6.2937 per dollar a week ago. In the offshore non-deliverable forward (NDF) market, one-year NDFs implied yuan appreciation of 0.16 percent on Friday afternoon, slightly higher than 0.13 percent implied on Thursday.
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