The yuan closed up against the dollar on Thursday after hitting a record high and climbing more than 1 percent for the first time so far this year, as the People's Bank of China hastened to let the currency appreciate while the US Dollar Index tumbled to a three-year low.
Spot yuan closed at 6.5205 versus the dollar, up from Wednesday's close of 6.5255 and has now risen 4.68 percent since it was depegged in June 2010, and 1.06 percent so far this year. It touched an all-time high of 6.5174 in late trade, toppling the former record of 6.5244 hit on Tuesday. Also spot yuan can trade up or down 0.5 percent against the dollar in a day in line with Chinese regulations.
The PBOC can easily achieve a 2 or 3 percent yuan appreciation by setting the yuan's mid-point higher each day without contradicting the government's stance of gradualism, they said. Offshore, one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3420 in late trade, down from 6.3560 at Wednesday's close. Their implied yuan appreciation in a year's time rose to 2.85 percent from 2.62 percent.
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