China's yuan eased on Friday, retracing after a week of gains, but traders stuck to predictions that the currency would strengthen over coming weeks. The currency closed at 8.1037 per dollar, versus a close of 8.1027 per dollar on Thursday, just shy of a record of 8.1025 since Beijing revalue the currency by 2.1 percent on July 21.
The yuan moved in a range of 17 points, hitting a high of 8.1027 to the dollar and a low of 8.1044. Dealers saw no signs of central bank intervention.
"Trade was steady but relatively thin. No one wanted to take positions over the weekend," said a dealer at a Chinese bank.
"There was also a bit of a correction after it hit yesterday's levels."
Traders said the market was still trying to find its feet and get used to the new trading regime, though the yuan was expected to strengthen further next week.
"Despite the uncertainty in the market as to what limits are going to be placed, I would still predict that the yuan will go up next week," said a dealer at another major Chinese bank who saw the currency hovering at 8.1020 to the dollar next week. Over the longer term, the yuan is expected to appreciate about 4 percent over the next 12 months, according to a Reuters poll of currency strategists.
The country's central bank said again on Thursday it would adjust the yuan's "floating band" at an appropriate time. On Friday, the yuan weakened against the euro to 10.0200 versus Thursday's 9.9940, but firmed to 7.2720 against 100 yen versus 7.2929.
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