The yuan closed up slightly against the dollar on Friday due to bank clients' dollar purchases late in the session, but traders said investors trimmed their expectations of yuan appreciation in the near term amid renewed Chinese-US tensions on the currency front.
The People's Bank of China set its mid-point, from which the yuan can rise or fall 0.5 percent in a day, slightly weaker on Friday, adding fuel to speculation that the yuan's steady gains seen so far this year may take a breather. Spot yuan closed at 6.3785 compared with Thursday's close of 3.3820. It has now risen 3.31 percent since the start of this year and 7.02 percent since it was depegged from the dollar in June 2010.
Before trade began, the PBOC set its mid-point against the dollar weaker at 6.3762 compared with Thursday's 6.3737. Offshore, one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.4000 in late trade, falling slightly from 6.4070 at the close on Thursday.