The yuan ended slightly up against the dollar on Tuesday, although the People's Bank of China set a lower mid-point, as the dollar hit a fresh one-month high versus a basket of currencies. Dealers said there were no signs that the Chinese central bank would allow the yuan to move sharply against the US currency any time soon.
Before trading began, the PBOC fixed the mid-point, or its daily reference rate against the dollar, at 6.7999, weaker from Monday's 6.7989. Spot yuan closed at 6.7972 per dollar, 0.43 percent up against the dollar since the Chinese currency was depegged on June 19. The yuan rose as high as 0.91 percent against the dollar since it was depegged.
The dollar index hit an intraday high at 83.515 against a basket of currencies on Tuesday, the highest level since July 14. One-month dollar-yuan NDFs briefly perked up to a one-week high led by a weaker spot yuan and bids from Chinese companies. The pop in front-month NDFs also dragged the one-year NDFs up. One-month NDFs was at 6.6948 after popping to 6.7991 in early deals, its highest since last Tuesday. One-year NDFs now reflect an expected appreciation of 1.81 percent, above 1.75 percent on Monday.