The yuan closed down slightly versus the dollar on Tuesday as the People's Bank of China set its midpoint weaker in a signal it is allowing the Chinese currency to track the greenback's global movements more closely, traders said. They said that a lack of major market-moving factors appeared to have pushed the PBOC to allow the yuan to move more closely in the opposite direction as the dollar, creating a good opportunity for China to conduct yuan reforms.
Spot yuan closed at 6.3080 versus the dollar, slightly weaker than Monday's close of 6.3067. Before trading began, the PBOC set the midpoint at 6.3141, weaker than Monday's 6.3121. In the offshore non-deliverable forwards (NDF) market, the benchmark one-year NDFs implied yuan appreciation of 0.21 percent in afternoon trade, compared with 0.43 percent they implied at Monday's close.
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