SHANGHAI: China's yuan rose slightly on Tuesday after the central bank set its official midpoint nearly flat, fueling expectations that the currency will soon resume appreciation, traders said.
Spot yuan changed hands around 6.1219 per dollar near midday, 0.02 percent up from Monday's close of 6.1229, after the People's Bank of China (PBOC) set its midpoint at 6.1697, only 7 pips softer than Monday.
"We feel the yuan is still on a measured uptrend," said a dealer at a European bank in Shanghai.
"But the yuan's rises this year have largely been guided by the PBOC, and the market remains reliant on the central bank for guidance on appreciation."
In addition, market players report heavier corporate dollar sales compared to purchases, a sign of continued capital inflows into China, adding further weight to appreciation expectations.
The PBOC launched a new phase of yuan appreciation about two weeks ago, and the currency has hit a slew of record highs since then, touching an all-time high of 6.1090 last Friday.
The yuan is likely to continue to appreciate in a measured way at least until early September, when a G20 summit kicks off in Moscow, traders said. China has traditionally let the yuan appreciate ahead of major international political events in a gesture to trading partners who feel the yuan is undervalued.
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