The yuan touched an all-time high versus the dollar on Thursday after the People's Bank of China set a record high fixing, sending a signal that the government wants to continue to let the currency appreciate for now. Spot yuan hit an all-time high of 6.4563 against the dollar, toppling its historical trading high of 6.4599 hit on July 4. It finished slightly off the intraday high at 6.4576, still stronger than Wednesday's close of 6.4676.
Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3880 in late trade, down slightly from 6.3920 at the previous close. Their implied yuan appreciation in a year's time rose to 1.18 percent from 1.12 percent. NDFs have generally underestimated the potential for yuan appreciation since the start of this year due to factors such as betting on a stronger-than-expected US economic recovery early in the year and funds being diverted to Hong Kong's rapidly developing yuan offshore deliverable market.