Yuan strengthens

China's yuan strengthened on Monday morning as the dollar slipped, while rates in the inter-bank market fell back but remained elevated after the central bank's move last week to ease tight liquidity.
The People's Bank of China set the yuan on a firmer course in early trade, fixing the midpoint at 6.8572 per dollar prior to market open, 121 pips stronger than the previous fix of 6.8693.
The slide in the dollar pushed up spot yuan by more than 400 pips at one point.
The spot market opened at 6.8570 per dollar and was changing hands at 6.8480 at midday, 340 pips stronger than the previous late session close and 0.13 percent firmer than the midpoint.
The offshore yuan was trading 0.43 percent firmer than the onshore spot at 6.8188 per dollar at noon.
Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 7.099, 3.41 percent weaker than the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate.
The strength in the official yuan guidance rate was due to a broad slide in the US currency after Donald Trump's protectionist inauguration address. His first speech as president on Friday highlighted his "America first" policies, which disappointed some investors hoping for details on his plans to stoke growth and reduce taxes.
A gauge measuring dollar strength against six other currencies fell to 100.36 at midday, compared with the previous close of 100.74.