China's yuan weakened against the dollar on Friday, due to corporate demand for the greenback, but the Chinese currency was on track for its best week in more than two months. The People's Bank of China set the midpoint rate at 6.8873 per dollar prior to market open, weaker than the previous fix of 6.8862.
In the spot market, the yuan opened at 6.8980 per dollar and was changing hands at 6.9019 at midday, 16 pips weaker than the previous late session close and 0.21 percent softer than the midpoint. For the week, the onshore yuan is set for a nearly 0.2 percent gain against the US unit, the biggest weekly percentage rise since mid-January.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.62, weaker than the previous day's 94.84. The global dollar index fell to 100.25 from the previous close of 100.36.
The offshore yuan was trading 0.36 percent firmer than the onshore spot at 6.877 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 7.0963, 2.95 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
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