The yuan came off early highs, but was still marginally firmer against the dollar on Friday after the central bank fixed a stronger midpoint. If the yuan closes around the midday level, it will weaken a mild 0.2 percent for the week, partly due to bearish pressures arising from mounting expectations that US interest rates will rise in June.
The People's Bank of China set the midpoint rate at 6.5510 per dollar prior to market open, 0.03 percent firmer than the previous fix 6.5531. Spot yuan opened at 6.5391 per dollar and then eased to trade at 6.5454 by midday, but was still 0.12 percent firmer than the previous close. "The fact that the market traded around 6.5450 indicated the price was fairly acceptable for our corporate clients," said a trader at a Chinese commercial bank in Shanghai. The first batch of foreign commercial banks has registered to directly trade yuan used for overseas trade settlement and can begin doing so on Friday, the foreign exchange market operator said.
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