The yuan closed slightly lower against the dollar on Thursday as the market was disappointed the People's Bank of China failed to let its daily fixing hit a record high. The central bank fixed a higher yuan mid-point on Thursday but traders had expected the fixing to hit another record high as the government appeared to be using the currency to help fight imported inflation propelled by high global commodity prices.
Spot yuan closed at 6.5787 to the dollar compared with Wednesday's close of 6.5743 and having now risen 3.77 percent since its depegging from the dollar in June 2010. Before trading began, the PBOC fixed the yuan's mid-point at 6.5795 versus the dollar, stronger than Wednesday's 6.5828. The daily fixing, from which the yuan can trade up or down a maximum 0.5 percent in a given day, is used by the central bank to express the government's intentions for the currency. Benchmark one-year dollar/yuan non-deliverable forwards were bid at 6.4310 late on Thursday, up from 6.4200 at Wednesday's close. Their implied yuan appreciation in a year's time fell to 2.31 percent from 2.49 percent.