China's yuan hit its lowest point in more than a week on Friday after the central bank set a weaker mid-point for the second straight day following a surge in the dollar overnight. Spot yuan closed slightly down at 6.3095 per dollar against Thursday's close of 6.3017.
The People's Bank of China (PBOC) set a mid-point of 6.3166, 51 pips weaker than Thursday's mid-point and 165 pips weaker than Wednesday, when the yuan broke 6.30 to an intraday high of 6.2919. It marked the largest two-day decline in the mid-point since mid-October, when the mid-point dropped 279 pips over the course of three days.
The PBOC's weaker mid-point was a response to a fall in the euro, dealers said. The euro hit a 15-month low against the dollar on Thursday. Offshore, benchmark one-year non-deliverable forwards (NDFs) weakened slightly to 6.3450 on Friday against 6.3400 at the close on Thursday, implying depreciation over the next year. Offshore forwards now imply a 0.56 percent depreciation.
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