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Yuan hits new high against US dollar

(Xinhua)
Updated: 2007-07-10 13:44

China's currency, the yuan, hit a new high against the US dollar on
Tuesday, according to the Chinese Foreign Exchange Trading System.

The value of the yuan went up 240 basis points from Monday's 7.6085
against the US dollar to open for trade on Tuesday at 7.5845, the highest
level since the yuan was revalued by 2.1 percent from 8.28 yuan in July
2005.

It is the 49th time that the yuan's value has hit a new record this year,
climbing by 2,242 basis points from 7.8087 on the last trading day of
2006.

The weak US dollar on the international market is a main reason for the
yuan's appreciation, said Ye Yaoting, a senior analyst with the
Shanghai-based Bank of Communications.

The yuan's performance against other currencies such as the euro has been
much less spectacular.

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Ye said the US complaints about a slow appreciation of the yuan brought
pressure to bear upon the currency.

As theconsumer price index, China's inflation rate, is predicted to
maintain at above three percent in June, the market expectation for an
interest rate hike has also pushed up the yuan's value, said Ye.

Food prices have been on the rise in China this year, pushing the
country's inflation rate to 3.4 percent in May compared with a year
earlier, higher than the government's warning level of three percent.

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