China Yuan up Late on Corporate Dollar Selling, Tight Yuan Liquidity

                                      Vs Parity  Previous 
    USD/CNY Central Parity   6.2384                6.2360 
    USD/CNY OTC 0830 GMT     6.1781      -0.97%    6.1791 
                High         6.1803      -0.93% 
                Low          6.1770      -0.98% 

    SHANGHAI--China's yuan rose against the U.S. dollar late Wednesday on heavy dollar selling pressure from corporates, and due to tight yuan liquidity at the month-end, despite the central bank guiding it weaker via a daily reference rate.

    In the over-the-counter market, the dollar was at CNY6.1781 around 0830 GMT, lower than Tuesday's close of CNY6.1791. It traded in a range of CNY6.1770 to CNY6.1803.

    The People's Bank of China set the dollar/yuan central parity rate at 6.2384, higher than Tuesday's 6.2360, following dollar strength overseas.

    "There is still lots of dollar selling from corporates, who might have collected those dollars from their export businesses," a Shanghai-based trader with a foreign bank said, adding that continued expectation that the central bank may widen the yuan's trading band added to investors' concerns of the yuan continuing to rise.

    Traders said tight liquidity ahead of the month's end and a national holiday also pushed corporates to sell the dollar to meet yuan currency needs. China's financial markets will be closed from Monday to Wednesday next week for a holiday.

    The yuan has risen 0.8% against the dollar since the start of 2013.

    Offshore, one-year dollar/yuan nondeliverable forward contracts fell to 6.2496/6.2533 from 6.2545/6.2565 late Tuesday, implying a 1.1% fall by the yuan over the next year.

    In the offshore yuan market in Hong Kong, where the Chinese currency floats freely, the dollar was at CNY6.1735, lower than CNY6.1768 late Tuesday.

    Write to Wynne Wang at