Yuan ends up

China's yuan closed up versus the dollar after hitting an all-time peak in intraday trade on Tuesday as the People's Bank of China set another record high mid-point, with traders predicting further rises for the rest of the year. Traders said the government was apparently using the yuan's exchange rate to help fight high inflation as well as help improve China's economic structure and raise the yuan's global status.
In the latest sign of official jitters over rising prices, the National Development and Reform Commission said high global commodity prices have led to imported inflation in the world's second-largest economy. Persistently high global prices for commodities and other goods were fueling consumer inflation in China and might put Beijing's full-year inflation target of 4 percent out of reach, the country's top economic planner said.
Spot yuan closed at 6.3805 versus the dollar, stronger than Monday's close of 6.3810. It has now appreciated 7 percent since it was depegged from the dollar in June 2010 and 3.27 percent so far this year. It hit the all-time trading high of 6.3705 in the afternoon session, topping its previous record high of 6.3801 on Monday.
Before trading began, the PBOC fixed the mid-point at 6.3849, topping the fixing's previous all-time high of 6.3883 set on Monday. The PBOC has engineered several rounds of yuan appreciation against the US dollar since the start of this year. Traders said the central bank was likely to let the yuan rise further at least in the near term albeit at a controlled pace - often defined as the "two steps forward, one step back" approach - to deter speculation on one-way appreciation. Offshore, the one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.2785 in late trade, down from Monday's close of 6.2830, with their implied yuan rise in a year's time rising to 1.69 percent from 1.62 percent.