The yuan closed slightly weaker on Friday, with traders citing a re-emergence of Chinese corporate demand for dollars, as the central bank set a weaker official trading range for a second day running after the yuan's record high earlier in the week. The yuan closed at 6.2356 to the dollar, weaker than Thursday's close of 6.2334, 0.17 percent off the record high of 6.2252 struck on Wednesday.
The central bank set its midpoint at 6.2945 per dollar versus Thursday's 6.2905. Under China's managed float regime, the exchange rate can diverge 1 percent either side of the midpoint fix, set by the central bank each day. The yuan never hit its strong-side limit on Friday, the first time it has failed to do so in the last 14 trading days. "The central bank's consecutive stronger fixes have buoyed demand for dollars, and even clients who before were steering well clear have warmed back up to buying the currency," said a trader at a large state-owned bank in Shanghai.