China's yuan ended flat on Tuesday, after the central bank set the mid-point near a record high, showing its intention to let the Chinese currency rise faster ahead of a G20 meeting. The People's Bank of China fixed the mid-point at 6.3293 versus the dollar, near Monday's record high of 6.3233. The dollar/yuan exchange rate can move up or down 0.5 percent from the mid-point each day.
The market interpreted the high mid-points as a positive gesture from Beijing before a gathering of the world's major powers in France on November 3-4, to discuss how they can contain the European debt crisis and boost global recovery. The yuan eventually ended at 6.3543 versus dollar, almost unchanged from Monday's close of 6.3549.
Offshore, spot yuan traded slightly down at 6.3950 versus the dollar, from Monday's close of 6.3910. One-year dollar/yuan non-deliverable forwards traded at 6.3770, from its close of 6.3620 on Monday, indicating a depreciation of 0.75 percent in the 12 months from now, versus a fall of 0.6 percent on Monday. The yuan has gained 3.7 percent against the dollar so far this year. It resumed appreciation in October, moving up 0.49 percent, after losing 0.12 percent in September.
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