The yuan jumped to a record high versus the dollar on Monday after the People's Bank of China set a historical high mid-point following a drop in the dollar index after Standard & Poor's downgraded the US credit rating. Spot yuan hit a record and intraday high of 6.4250 per dollar on Monday and ended at 6.4360, stronger than Friday's close of 6.4404. It has now appreciated 6.24 percent since it was depegged from the dollar in June 2010 and 2.56 percent so far this year.
Before trade began the PBOC fixed the yuan's mid-point at an all-time high of 6.4305 against the dollar, stronger than Friday's 6.4451. China's central bank raised its mid-point fixing for the yuan by 0.2 percent per dollar, the biggest rise since mid-November. The dollar/yuan exchange rate may rise or fall 0.5 percent from the mid-point each day. Offshore, benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3760 late on Monday, weaker than 6.3830 at the previous day's close. Their implied yuan appreciation in a year's time rose to 0.85 percent from 0.74 percent.