China's yuan closed a whisker away from a record high after firming for a sixth straight session on Monday, and it would have gained more if hadn't been restricted by the official daily trading range, as Chinese firms struggled to reduce long dollar positions.
All but a handful of trades occurred at 6.2255 versus the dollar, the strongest level permitted by the daily trading range set by the central bank. Closing on the limit, it was just shy of the yuan's record high of 6.2252 struck on November 14. On Friday, the yuan had closed at 6.2285.
The yuan has hit repeated highs against the dollar since late September, fuelled partly by speculation that the central bank would finally relent to let the yuan appreciate more. The central bank set its midpoint at 6.2884 to the dollar, slightly firmer than Friday's fix of 6.2906. The exchange rate can rise or fall 1 percent from the mid-point set by the central bank each day. Upward pressure on the yuan in the last four months has come from the unwinding of long dollar positions accumulated in the first seven months of this year, when the yuan depreciated severely, reaching a year low of 6.3967 on July 25.
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