The yuan climbed to its highest level on the dollar in nearly 14 months in benchmark offshore non-deliverable forwards (NDFs) on Wednesday as Chinese trade data showed a slowing in the pace of the decline in exports and the dollar fell on global markets.
One-year dollar/yuan NDFs hit a 14-month low of 6.6300 late on Wednesday, implying yuan appreciation of 2.97 percent in 12 months from the day's mid-point, or the reference rate set by the Chinese central bank, the highest since 3.04 percent implied yuan appreciation on August 28, 2008.
The dollar index dropped 0.64 percent in early European trade to 75.493 - its weakest level in 14 months against a basket of currencies on Wednesday, as investors bet on higher-yielding currencies amid growing optimism about the global economy. The People's Bank of China set the daily yuan mid-point at 6.8269 versus the dollar on Wednesday, up marginally from Tuesday's 6.8270, which guided spot yuan to close at 6.8265 against the dollar.
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