The yuan closed down against the dollar on Wednesday after China's central bank pulled the mid-point back from a record high, affirming market expectations the authorities will likely keep the currency stable for now. The People's Bank of China has so far refrained from letting the yuan's mid-point breach the psychologically important 6.60 level, suggesting it may not be ready to let the yuan rise significantly, traders said.
The yuan had been overly active in recent days and gains were likely to be tempered for a while, dealers said, but a slow and steady appreciation could be expected. Before trade began, the PBOC fixed the yuan's mid-point versus the dollar at 6.6295, weaker than Tuesday's 6.6215 - a record high for the third straight trading day.
Spot yuan finished at 6.6190 versus the dollar, down from Tuesday's close of 6.6088. It hit a record high of 6.5896 last week. Benchmark one-year non-deliverable dollar/yuan forwards were bid at 6.4400 late on Wednesday, up from Tuesday's close of 6.4350. Their implied yuan appreciation in a year's time fell slightly to 2.94 percent from 3.02 percent.
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