Vs Parity Pvs USD/CNY Central Parity 6.3301 6.3317 USD/CNY OTC 0830 GMT 6.3538 +0.37% 6.3424 High 6.3607 +0.48% Low 6.3354 +0.08% SHANGHAI (Dow Jones)--China's yuan fell against the U.S. dollar late Monday on heavy demand for the greenback for settlement purposes, reversing gains earlier in the day when it tracked the central bank's guidance via a daily reference rate. The weaker yuan came on the back of Chinese President Hu Jintao's comments over the weekend that China would not be changing its foreign exchange rate policy. On the over-the-counter market, the dollar was at CNY6.3538 around 0830 GMT, up from Friday's close of CNY6.3424. It traded between CNY6.3354 and CNY6.3607 for the session, setting a record intraday low in the process. The yuan has risen 3.7% against the U.S. unit so far this year and 7.4% since June 2010, when China ended its currency's peg to the greenback. The People's Bank of China set the dollar-yuan central parity rate at 6.3301 Monday, down from Friday's 6.3317, in tandem with the dollar's weakness overseas. The ICE Dollar Index, which tracks the U.S. dollar against a trade-weighted basket of currencies, was at 76.910 late Friday in New York, down from 77.606 late Thursday. At around 0830 GMT, the dollar index was at 77.105. Hu defended Beijing's foreign exchange rate policy at the Asia Pacific Economic Cooperation annual summit in Hawaii. He said that present economic problems confronting the U.S. were not caused by the dollar-yuan exchange rates, but were structural problems which even a big rise in the Chinese currency could not resolve. "There isn't much change in expectations for the yuan's movement. President Hu said over the weekend that China will continue its currency reforms. At the same time, he said that the trade deficit and job-market problems in the U.S. weren't caused by yuan exchange rates. These comments even each other out," said a Beijing-based local bank trader. Traders said they were eyeing developments in the euro zone and movements in the euro as these were likely to affect spot trading for the rest of the week. "More dollar demand from companies emerged in the afternoon, and there were some large orders from the bigger state-owned banks," said a Guangzhou-based foreign bank trader. He also said that arbitrage activity between the onshore and offshore yuan markets had dried up and he did not see any PBOC-led intervention. Offshore, one-year dollar-yuan non-deliverable forward contracts rose to 6.3365/6.3405 from 6.3320/6.3360 late Friday, implying a 0.3% rise in the yuan against the U.S. currency over the next year. In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar-yuan exchange rate was at 6.3515 late Monday, down from 6.3580 late Friday, in line with the greenback's broad weakness against regional currencies. -By Esther Fung, Dow Jones Newswires; 86-21-6120-1200; esther.fung@dowjones.com

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