Banking News
- Yuan rises above 7.70 to dollar
Date: 9-May-2007 Sources: (Shenzhen Daily)
CHINA'S yuan hit a post-revaluation high against the dollar yesterday after the central bank set its mid-point at a record level breaking the 7.70 barrier.
Before trading began yesterday morning, the first day after the weeklong holiday recess, the People's Bank of China set the yuan's daily mid-point at 7.6951 to the dollar, breaching the psychologically important level of 7.7000 for the first time.
The yuan was trading at 7.6950 at noon, after reaching 7.6942, its highest since it was revalued and freed from a dollar peg in July 2005. It previously peaked April 30, when it touched an intraday high of 7.7025.
This is the 27th time since the beginning of the year that the yuan has set a new record, climbing 1,136 basis points, from 7.8087 yuan to one U.S. dollar posted on the last business day of 2006.
The yuan also gained ground yesterday against the Japanese yen. It reached 6.4080 yuan to 100 yen, up 361 basis points, from the last trading day's level.
The local currency also gained 369 basis points from 10.4999 yuan to one euro.
Traders attributed the strong mid-point to general weakness in the dollar on global markets.
Market expectations of a rate hike, most likely in the second half, also helped to set the yuan on an upward trend, they added.
The central bank has been focusing on tightening monetary policy to absorb excess money market liquidity.
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