Yuan ends down

The yuan ended down slightly against the dollar on Friday after the Chinese central bank set a weaker mid-point, and as worries that the eurozone might be shrinking faster than thought continued to fuel buying in the US currency. Market watchers have growing doubts over what a European summit can achieve to lift Europe from a debt crisis, while the European Central Bank poured cold water on wishes it would buy up more bonds of debt-laden eurozone states.
Before trading began, the PBOC fixed the day's mid-point at 6.3352, weaker than Thursday's 6.3319. The central bank uses the fixing to express the government's intention for the yuan's daily movement. Benchmark offshore one-year dollar/yuan non-deliverable forwards (NDFs) have largely been forecasting yuan depreciation in a year's time since late September, reversing a trend of appreciation since the yuan's revaluation in July 2005. One-year NDFs were bid at 6.4090 on Friday against 6.4050 at the close on Thursday, implying that the yuan would depreciate 0.99 percent in 12 months.