The yuan closed slightly lower against the dollar on Thursday even after the People's Bank of China set an all-time high mid-point fixing, but traders expect yuan appreciation to still be on the cards despite some short-term correction. Spot yuan closed at 6.4390, weaker than Wednesday's close of 6.4341. It has now appreciated 6.01 percent since it was depegged from the dollar in June 2010 and 2.34 percent so far this year.
Before trade began the PBOC fixed the yuan's mid-point at a record high of 6.4386 against the dollar, stronger than Wednesday's 6.4441. Some dealers said recent uncertainties hanging over major global currencies, such as the dollar, euro and yen, had shifted investors' attention from the yuan, providing a good environment for the Chinese currency to rise in a steady way. Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3650 in late trade, firmer than 6.3670 at the previous day's close. Their implied yuan appreciation in a year's time fell to 1.16 percent from 1.21 percent.