Offshore dollar/yuan forwards fell across the curve on Friday, with the one-month tenor hitting a record low, as a string of record high mid-points and a vow by the central bank to further open its bond market boosted expectations of yuan appreciation.
The People's Bank of China (PBOC) set a fifth consecutive record high mid-point on Friday and later in the morning said it would allow the yuan to be traded against a wider variety of currencies as well as open up the domestic bond market further.
Benchmark one-year NDFs hit a nearly three-year low of 6.3600 on Friday, later bouncing back a bit to 6.3745 to imply 2.6 percent yuan appreciation in a year's time, up from the 2.3 percent rise as implied at Thursday's close.
One-month NDFs hit an all-time low of 6.5010 at one point, down from their close of 6.5230 on Thursday . Spot yuan hit a record high of 6.5350 versus the dollar on Friday, up from Thursday's close of 6.5420. It closed at 6.5354, having now risen 4.5 percent since it was depegged in June 2010 and 0.8 percent so far this year.
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