The yuan closed down slightly versus the dollar on Friday as the People's Bank of China pulled the yuan's mid-point back from a record high, suggesting the authorities may temper the currency's pace of appreciation, traders said. Yuan gains appear to be still on the cards because China is adjusting its economic structure to make its economy less reliant on exports.
But the pace could be more measured due to a weaker-than-expected recovery in Europe and the United States from the financial crisis, traders said. Spot yuan closed at 6.4630 versus the dollar, slightly off from 6.4576 at the previous close. It hit an all-time intraday trading high of 6.4563 on Thursday. It has now appreciated 5.61 percent since it was depegged from the dollar in June 2010 and 1.96 percent so far this year. Before trade began, the PBOC fixed the yuan's mid-point at 6.4665 versus the dollar, marginally weaker than a record high of 6.4640 fixed on Thursday. Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.39 6 0 in late trade, up from 6.3870 at the previous close. Their implied yuan rise in a year's time fell to 1.1 0 percent from 1.24 percent.
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