The yuan hit a record high against the dollar on Thursday after the People's Bank of China set a higher mid-point, sparking expectations of more appreciation in the first quarter of next year. Spot yuan hit an intraday high of 6.6000, the highest level since its revaluation and accompanying forex reforms in July 2005.
That was up 0.3 percent from Wednesday's close, the biggest daily percent rise in around seven weeks. The yuan has now risen 1.2 percent from a low hit on December 20, marking one of its fastest series of gains since the currency was depegged from the dollar in mid-June. It has now gained 3.4 percent since the depegging.
The PBOC set the tone for the strong day by fixing the day's mid-point against the dollar, from which the yuan can rise or fall 0.5 percent in a given day, at a record high of 6.6229. Offshore, one-year non-deliverable dollar/yuan forwards were bid at 6.4560 late on Thursday, down slightly from Wednesday's close of 6.4730. The implied yuan appreciation in a year's time edged higher to 2.59 percent from 2.32 percent.
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