The Chinese yuan gained today against the US dollar, rising for the first time since 1993 beyond 6.6 yuans per dollar level, on the speculation that the government may allow the currency to appreciate faster in an attempt to rein the inflation. The currency weakened against the euro.The People’s Bank of China raised the reference rate today to 6.6227 per dollar from yesterday’s 6.6229, increasing it for the ninth day. The yuan is allowed to trade by up to 0.5 percent either side of the rate. The US Dollar Index, which tracks the strength of the greenback versus the currencies of the US major trading partners, retreated for the seventh day.
It looks like the Chinese policy makers recognized the usefulness of the strong currency in the battle with the inflation. The yuan advanced 0.57 percent this week, posting the fifth weekly gain, and touched the strongest price since China unified official and market exchange rates at the end of 1993.
USD/CNY traded at about 6.5916 as of 12:04 GMT after opening at 6.6035 and falling to the intraday low of 6.5897. EUR/CNY rose from 8.7764 to 8.8223, following the decline to the intraday low of 8.7653.
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