Others News
- Yuan rises to new high
Date: 26-Jul-2007 Sources: (Shenzhen Daily)
THE yuan surged to a post-revaluation high yesterday after the central bank set a record high mid-point, amid signs of rising U.S. pressure on China to let its currency appreciate more quickly.
U.S. Treasury Secretary Henry Paulson said yesterday he would visit Beijing next week to discuss long-term issues including an increase in the Chinese currency's flexibility.
'The mid-point has pushed the yuan to appreciate a little faster. Henry Paulson's visit could have led the central bank to set the mid-point at the record,'said a trader at a major domestic bank.
The yuan was trading at 7.5550 to the dollar yesterday, up from Tuesday's close of 7.5625 and near its intraday peak of 7.5549, its highest since the currency was revalued and depegged from the U.S. dollar in July 2005.
Before the start of trade, the People's Bank of China fixed its daily mid-point at a record 7.5596 to the dollar, much stronger than Tuesday's 7.5725.
The pace of yuan appreciation has picked up in recent weeks, rising at a nearly 10 percent annualized rate in the last 20 trading days, but many analysts are forecasting a rise around 5 percent for the whole year. Last year the currency gained 3.4 percent.
The Chinese Government is probably not ready to allow appreciation of more than 6 percent over the next 12 months, Standard Chartered said in a research report.
Traders do not expect the prospects for rising U.S. pressure on Chinese policy to have a major effect on the yuan in the coming days, while there is a possibility of a slight correction by the week's end.
'The yuan has passed the 7.56 mark. I think it will continue to rise, but there is also a slight chance we may see a slight correction by the end of week, depending on how fast the yuan goes up tomorrow,'the trader said.
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