Spot yuan on Friday ended at its highest closing level against the dollar since a landmark revaluation in July 2005, supported by strong expectations of a further strengthening of the Chinese currency amid mounting political pressure. In addition to demands from the United States on China for a stronger yuan, European Commission officials said on Thursday that the European Union would keep pressing China to revalue the yuan.
The yuan ended at a post-revaluation closing high of 6.6706 against the dollar, near its post-revaluation intraday high of 6.6700 touched late in the session and up from its previous trading close of 6.6912 on September 30. The Chinese central bank fixed the yuan's daily mid-point, or its reference rate from which the yuan can rise or fall 0.5 percent in a day, at a record high of 6.6830 on Friday. The yuan has now risen 2.3 percent since the PBOC announced its depegging to the dollar on June 19 but the gain has still lagged far behind a nearly 10 percent plunge in the US dollar index in the same period. Benchmark one-year NDFs were bid at 6.4580 in early trade, implying 12-month yuan appreciation of 3.48 percent.