The yuan ended up against the dollar on Monday as the People's Bank of China set the mid-point at a one-month high, but the Chinese currency hit the weaker end of its daily trading band on uncertainty over how much room there is for the yuan to rise. Spot yuan ended at 6.3606 and hit limit down for the ninth straight day at 6.3613 versus the dollar. It closed at 6.3647 on Friday. The yuan has risen 3.60 percent so far this year and 7.32 percent since its depegging in June 2010.
Benchmark offshore one-year dollar/yuan non-deliverable forwards (NDFs) have largely been forecasting yuan depreciation in a year's time since late September, reversing a trend of appreciation since the yuan's revaluation in July 2005. One-year NDFs were bid at 6.4070 on Monday against 6.4050 at the close on Friday, implying that the yuan would depreciate 1.19 percent in 12 months from Monday's PBOC mid-point, compared with a 1.19 percent fall implied on Friday.
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