The yuan closed slightly higher against the dollar on Tuesday as the dollar index showed signs of stabilising after its recent rally, pushing the Chinese currency off its intraday low. The euro-dominated dollar index touched a four-month high in early Asian trade but was unable to advance afterwards and retreated slightly in early European trade when the Chinese market closed.
Spot yuan closed at 6.3182 per dollar, rebounding slightly from an intraday low of 6.3267 touched in early trade and compared with 6.3215 at Monday's close. The People's Bank of China (PBOC) fixed the daily midpoint at 6.3110, slightly weaker than Monday's 6.3040. Still, the central bank has recently set a slew of midpoints stronger than the yuan's trading level, signalling that it does not want the yuan to depreciate sharply.
Offshore one-year non-deliverable yuan forward contracts continued to trade at a discount to the spot price, changing hands at 6.3745 in the afternoon session for a discount of 1 percent to Tuesday's midpoint. Offshore spot yuan was at 6.3205 in late trade, largely in line with the trend in the onshore spot market.
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