The yuan hit a new trading peak against the dollar on Friday, extending a steep rise earlier this week as a record high central bank mid-point for the third straight day may be signalling a change in China's currency policy to cope with new global market conditions, traders say.
The People's Bank of China's record high reference rate, the biggest three-day rise since January, comes at a time when major global currencies are losing their lustre. Spot yuan hit a record high of 6.3890 per dollar in intraday trading before falling marginally off the high to close at 6.3895, still up from Thursday's close of 6.3945. It has now appreciated 6.83 percent since it was depegged from the dollar in June 2010 and 3.13 percent so far this year.
It appreciated 0.79 percent this week, compared with a rise of 0.36 percent from the start of July to the end of last week. Before trade began, the PBOC fixed the yuan's mid-point versus the dollar at a record high of 6.3972, stronger than Thursday's historical high of 6.3991. Offshore, one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.26 70 in late trade, down slightly from 6.2690 at Thursday's close. The implied yuan rise in a year's time rose to 2.0 7 percent from 2.04 percent.