Foreign Exchange News
- Yuan hits post-revaluation high
Date: 26-Jan-2007 Sources: (Shenzhen Daily)
THE yuan rose against the U.S. dollar in late trade Thursday, hitting its highest level since its 2005 revaluation after macroeconomic data published by the government indicated the need for a further appreciation of the Chinese currency, dealers said.
The yuan was trading at an intraday high of 7.7680, up from 7.7725 at the close Wednesday and setting its highest level since the currency was revalued by 2.1 percent and depegged from the dollar in July 2005.
Dealers said the yuan's strength came mainly because the central bank set its mid-point at a post-revaluation high of 7.7735 Thursday morning, up from the previous mid-point of 7.7755, signalling the government's willingness to allow the currency to continue the relatively rapid appreciation seen so far this year.
Data for last year issued Thursday, including higher-than-expected inflation, also pointed to the need for further yuan appreciation, dealers said.
'The market is optimistic over the potential for the yuan to rise at a faster pace this year against last year,'said a dealer at a major domestic commercial bank in Shenzhen.
Still, dealers said they were not in a rush to upgrade their forecast for the yuan's gains, but maintained the forecast that the yuan would rise to around 7.75 to the dollar in about a month's time and appreciate 5 percent in 2007, compared with a 3.4 percent gain last year.
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