China's yuan edged up against the dollar on Friday ahead of a meeting of top Group of Seven financial officials which may step up pressure on Beijing for faster appreciation.
But the yuan stayed below the day's mid-point set by the Chinese central bank, showing that despite rising expectations for yuan appreciation in the offshore forwards market, many onshore traders continue to think China will not permit a rapid rise any time soon.
The Chinese currency closed at 7.5080 to the dollar in very quiet, narrow trade, up from Thursday's close of 7.5111 and near its intra-day high of 7.5075. Before trade began, the central bank set the mid-point at 7.5074, up modestly from Thursday's 7.5113.
Dealers said they did not think the higher mid-point was related to the G7 meeting. "The stronger mid-point is a response to the weakness of the dollar in global markets, where it hit a three-week low against the yen," said a trader at a major international insurer. "It's not a goodwill gesture to the G7 ministers."
Earlier this month, euro zone finance ministers said they would make pressing for faster yuan appreciation a priority, raising the possibility of a concerted push by the United States and Europe.