Offshore dollar/yuan forwards fell across the curve late on Tuesday to imply more yuan appreciation in future, as a correction of the dollar in global markets after its 6-percent rise this month sparked some fresh dollar short selling in the dollar/yuan market.
The dollar index was quoted slightly above 86 in early European trade, drifting away from more than 87 hit on Monday - its highest level in 14 months against six major global currencies dominated by the euro.
The one-year dollar/yuan non-deliverable forwards (NDFs) fell to 6.6770 late on Tuesday from Monday's close of 6.6980, implying a 12-month yuan appreciation of 2.26 percent, up from 1.93 percent, as measured from the Chinese central bank's mid-point, or reference rate. And the three-month NDFs reversed an earlier rise to fall to 6.7640 from 6.7680 in late trade, with implied yuan appreciation in three months rising to 0.94 percent from 0.88 percent.
Spot yuan closed little changed at 6.8274 against the dollar on Tuesday from Monday's 6.8277 as the PBOC gave no hint of an imminent policy change as it fixed the yuan's daily mid-point barely changed at 6.8276 compared with Monday's 6.8275.
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