China's yuan firmed against the US dollar on Friday, after the central bank set a stronger midpoint, and was on track to end the week virtually flat as traders hunted for clues where it will move. The People's Bank of China set the midpoint rate at 6.8655 per dollar prior to market open, firmer than the previous fix of 6.8695.
The spot market opened at 6.8718 per dollar and was changing hands at 6.8705 at midday, 30 pips stronger than the previous late session close and 0.07 percent weaker than the midpoint.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.13, weaker than the previous day's 95.2. The global dollar index fell to 101.02 from the previous close of 101.05.
The offshore yuan was trading 0.25 percent stronger than the onshore spot at 6.8535 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 7.086, or 3.11 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
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