The yuan on Friday hit a record high as a global slide in the dollar consolidated optimism the yuan will continue appreciating in the coming days during Chinese President Hu Jintao's visit to Washington from January 18-20. The yuan hit an intraday high of 6.5870 versus the dollar, toppling its previous trading peak of 6.5896 touched on December 31. The Chinese currency started trading in 1994.
Spot yuan closed slightly off highs at 6.5900 versus the dollar but up sharply from Thursday's close of 6.6046, having risen 3.59 percent since its mid-June depegging. During the day, major state-owned companies were suspected to have helped the PBOC control the pace of yuan appreciation.
The People's Bank of China set a record high mid-point of 6.5896 on Friday, up from Thursday's 6.5997. It was a record high for the third day as Beijing was seen preparing to fend off US criticism of its currency policy days before Hu's US visit, despite the Chinese government saying it will not bow to foreign demand for faster gains in the yuan.
Offshore dollar/yuan forwards rose slightly to imply less yuan appreciation in line with the view that the recent spurt in the yuan could lose momentum soon. Benchmark one-year non-deliverable dollar/yuan forwards were bid at 6.4390 late in the session, up from Thursday's close of 6.4330. Their implied yuan appreciation in a year's time fell slightly to 2.34 percent from 2.44 percent.
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