China's yuan hit its highest level to the dollar on Thursday since its July revaluation, as dealers said market players took advantage of signs of increased tolerance from the central bank for a stronger currency.
The rise came ahead of a key visit to Beijing next week by two US senators who have said they were inclined to proceed with a vote on a bill threatening China with sanctions.
The yuan traded at its post-revaluation high of 8.0348 in early trade, up a marginal 0.04 percent from its close of 8.0377 on Wednesday when the currency scored its biggest one-day gain of 0.12 percent since its revaluation.
The currency has now appreciated a further 0.94 percent since Beijing revalued it by 2.1 percent on July 21 and freed it from a dollar peg to float within managed bands.
"Market players did not want to venture too far, too fast in order to avoid central bank intervention," said Shanghai-based dealer at a foreign bank.
The 8.0300 level is a landmark because the yuan would have gained 1 percent through the Shanghai-based interbank market after the ground-breaking policy change in July last year.
Beijing has said it will only allow the yuan to rise through the interbank market, ruling out another one-time revaluation.
The yuan is under heavy pressure to appreciate amid claims the currency is so undervalued that it gives Chinese products an unfair advantage in US markets, costing millions of lost American jobs and fuelling a record bilateral trade gap last year.
But dealers said there was no immediate impact from news of the mainland visit by Sen. Charles Schumer, a New York Democrat, and Sen. Lindsey Graham, a South Carolina Republican.
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