The yuan pulled back slightly against the dollar on Tuesday from a slew of recent record highs, as the People's Bank of China fixed a marginally weaker mid-point, signalling the central bank will stick to gradualism in reforming the country's currency regime.
The consolidation came after the yuan breezed past 6.50 per dollar last Friday, surpassing the psychologically important level for the first time and raising expectations that Beijing will continue to let the currency strengthen quickly to battle stubbornly high inflation.
Spot yuan closed at 6.4968 versus the dollar, down from 6.4910 at the close on Friday. It has now appreciated 5.07 percent since it was depegged from the dollar in June 2010, and 1.42 percent since the start of this year. Before trading began, the PBOC set the day's mid-point at 6.5002, marginally lower than Friday's record fixing of 6.4990. One-year non-deliverable forwards (NDFs) were bid at 6.3210 in late trade on Tuesday.
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