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China's yuan hits 4th straight high
(Reuters)
Updated: 2005-08-02 20:27
China's yuan strengthened beyond 8.1040 per dollar Tuesday, recording a
post-revaluation high for the fourth straight session as dealers gained
confidence that the central bank would allow small gains, the Reuters reported.
Dealers said the dollar's weakness against the euro and yen was the primary
reason for the yuan's rise Tuesday, when the currency closed at 8.1032 per
dollar after climbing as high as 8.1030.
The People's Bank of China, the nation's central bank, has lately allowed the
currency room to rise in small increments. Dealers said this has given the
market some confidence that Beijing would not step in to curtail a gradual
appreciation of the currency, which was revalued July 21.
"Though very tiny, gains over past days have amounted to a further
appreciation, indicating the central bank is giving the market larger leeway to
trade the yuan," said a dealer at a foreign bank. "And that will benefit China a
lot -- relieving international pressure for further revaluations and preparing
its banks and companies for the impact of an increasingly flexible forex
regime," the Reuter report said.
But others remained wary of pushing the currency too far too fast.
"The yuan's strength today was more or less in line with the dollar's
weakening on global markets," said a Shanghai-based dealer at Bank of China, the
country's top foreign exchange bank.
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