The yuan closed higher on Wednesday as corporates sold dollars, which had flooded in since China's onshore market resumed trading on Monday after a week-long holiday, traders said. The post-holiday influx of dollars had put off a long-anticipated correction in the yuan, they said, and had helped the Chinese currency defy a rally in the dollar in global markets.
Spot yuan closed at 6.2833 versus the dollar, up from Tuesday's close of 6.2878 and within an arm's reach of 6.2812 hit on Monday, which was its highest level since China set up the domestic foreign exchange market in 1994. It hit an intraday high of 6.2832 in the last minute of trade and a low of 6.2899 in the early session. "Dollar selling was heavy whenever the yuan approached 6.29," said a dealer at a European bank in Shanghai. "As trading indicates the yuan has little potential to fall, companies tend to bid the yuan at a higher level." Before Wednesday's trading began, the People's Bank of China set the yuan's midpoint at 6.3449, slightly weaker than Tuesday's 6.3441.