Yuan hits record high against greenback

SHANGHAI - Agence France-Presse

A clerk counts US dollar banknotes after counting Chinese 100 Yuan banknotes at a bank in Qionghai. REUTERS Photo

China’s yuan currency hit a record high against the U.S. dollar yesterday, as a recovery in the domestic economy and U.S. political pressure helped the unit strengthen, analysts said.

Trade data released over the weekend lifted confidence in the domestic economy, according to analysts, while an expected U.S. government report on exchange rates may be prompting the central bank to guide the yuan higher.

The yuan touched an intra-day high of 6.2262 to the dollar, according to the China Foreign Exchange Trade System, marking the strongest level since China launched its modern foreign exchange market in 1994.

It also registered a record closing high of 6.2265, firming from Monday’s close of 6.2291.

Demand for local currency rises

“China’s economic recovery, albeit weak, may attract foreign capital to put investment in yuan-denominated assets, driving demand for the currency,” a Beijing-based foreign exchange analyst, who declined to be named, told Agence France-Presse.

China’s exports rose 11.6 percent in October, according to official data, accelerating for a second straight month in fresh evidence of a broader rebound for the world’s second-largest economy.
The nation’s trade surplus, a source of friction with the United States and other countries, widened to $32 billion, up from $27.7 billion in September.

“Recent data showed the worst may have come and gone for the domestic economy,” Industrial Bank analyst Jiang Shu told AFP.