The yuan closed up against the dollar on Friday, hitting a record high in intraday trading, after the People's Bank of China fixed its daily mid-point at an all-time high for the second day in the latest sign that the government may be using the currency to help fight inflation.
Several major Chinese and foreign banks conducted China's first onshore yuan/dollar options on Friday, with the options' implied volatilities quoted in line with offshore yuan/dollar options, traders said. Spot yuan closed at 6.5479 versus the dollar, up from Thursday's close Of 6.5485. Friday is the final trading day before the Tombsweeping Day holiday. Markets will be closed on Monday and Tuesday.
The currency hit an all-time trading high of 6.5452 in afternoon trade, having risen 4.29 percent since it was depegged in June 2010. Before trading began, the PBOC fixed the yuan's mid-point at a record high of 6.5527, stronger than Thursday's historical high of 6.5564. Offshore benchmark one-year non-deliverable forwards were bid at 6.4190.
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