The yuan reversed early losses on Tuesday and firmed against the dollar by midday, a change of direction traders credited to weakness in other global currencies. The People's Bank of China set the midpoint rate at 6.4700 per dollar prior to market open, 0.13 percent firmer than the previous fix of 6.4787. The spot yuan opened at 6.4770 per dollar and was changing hands at 6.4740 at midday, strengthening 0.04 percent from the previous close.
Onshore one-year yuan/dollar deliverable forwards were quoted at 6.5515 around midday. That implies expectations that the yuan will depreciate more over 12 months than was implied by Monday's close of 6.5487. The offshore yuan was trading 0.12 percent softer than the onshore spot at 6.4820 per dollar, with traders saying the spread between the offshore rate and its onshore counterpart began to stabilise around 100 pips. Offshore one-year non-deliverable forwards contracts, considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.6595, or 2.85 percent softer than the midpoint.