Yuan at eight-week high

China's yuan edged up to an eight-week closing high on Friday in light trade and mild volatility as the dollar continued to soften in global markets. The dollar index has weakened since reaching a two-year high in late July, as weak US data raised the possibility of the Fed launching QE3. The yuan and other Asian currencies have strengthened as a result.
Spot yuan closed at 6.3484 per dollar on Friday, 12 pips stronger than Thursday's close. The slight strengthening occurred despite the central bank's setting its daily midpoint at 6.3449, 14 pips weaker than Thursday's close. Traders attributed the discrepancy to a weakening of the dollar index in morning trade in Asia. The slight fall erased a portion of the gains the greenback had chalked up overnight, which had prompted the central bank's weaker fix.