The yuan closed at its record trading high against the dollar on Thursday as the People's Bank of China fixed its daily mid-point at an all-time high for the fourth day, quickening the pace of the currency's appreciation to help fight inflation.
Spot yuan closed at a record high of 6.5420 versus the dollar, up from Wednesday's close of 6.5440, having risen 4.34 percent since it was depegged in June 2010, and 0.72 percent so far this year. Before trading began, the PBOC fixed the yuan's mid-point at a record high of 6.5456, stronger than Wednesday's historical high of 6.5496. The fixing, from which dollar/yuan can trade up or down a maximum 0.5 percent in a given day, is used by the PBOC to express the government's intentions for the currency.
Traders expected the yuan to continue rising and retained their forecasts for the yuan to appreciate 5 to 6 percent in 2011. Offshore, one-year non-deliverable forwards were bid at 6.3990 in late afternoon trade, marginally down from 6.4000 at Wednesday's close. Their implied yuan rise in a year's time was at 2.29 percent compared with 2.27 percent.