China's yuan reached a record high against the U.S. dollar late Monday after the central bank guided it stronger via a reference exchange rate. The dollar was at CNY6.2080 around 0830 GMT on the over-the-counter market, the lowest close since the launch of the modern Chinese currency trading system in 1994. It spent Monday moving between CNY6.2073 and CNY6.2090; it closed Friday at CNY6.2108. The yuan could further strengthen in coming sessions given foreign exchange inflows, market participants said. "The overwhelming interest of corporates is still to sell the dollar given a large trade surplus over the past few months," said a trader at a bank in Beijing. The yuan could reach another record if the central bank continues to guide its currency stronger in response to corporate yuan demand, the trader said. The yuan has risen 0.4% against the U.S. dollar since the start of the year. Ahead of trading, the People's Bank of China set the dollar-yuan central parity rate at 6.2674, within a hair of the lowest level of 6.2670 on May 2, 2012. The rate was 6.2689 on Friday. Yuan upside could be limited by uncertainty over the pace of economic recovery. Manufacturing activity rebounded in March, two surveys showed Monday. But economists are cautious about the overall growth outlook, saying the rebound was mainly the result of seasonal factors, and that the readings were subdued compared with previous years. Offshore, one-year dollar-yuan nondeliverable forwards fell to 6.2955/6.2975 from 6.2995/6.3025 late Friday, implying a 1.4% fall by the yuan against the dollar over the next year. Financial markets were closed Monday in Hong Kong, a center of offshore yuan trade.

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