The yuan closed up against the dollar on Thursday, hitting a record intraday trading high, after the People's Bank of China fixed its daily mid-point at an all-time high and the foreign exchange regulator tightened rules in a move traders said will pave the way for more yuan rises.
In response to the new regulations, onshore dollar/yuan forwards tumbled in intraday trading to reflect expectations of reduced activities in the future. The spread of the one-year onshore forwards against the offshore one-year non-deliverable forwards (NDFs) briefly entered negative territory for the first time since last July but rebounded late in the session.
The yuan closed at 6.5485 versus the dollar, up from Wednesday's close Of 6.5559. It hit an all-time trading high of 6.5478 in late trade, having risen 4.25 percent since it was depegged in June 2010, and 0.63 percent so far this year. While spot yuan trading remained relatively stable, one-year dollar/yuan onshore forwards staged a volatile session, slumping as low as 6.4059 bid from 6.4508 at the close on Wednesday.
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