China's yuan strengthened against the dollar on Tuesday as dealers said Bush's visit to China would pressure Beijing into allowing the yuan to further appreciate.
The yuan, which was revalued by 2.1 percent on July 21 to 8.11 per dollar, closed at 8.0867 per dollar, versus 8.0877 on Monday.
The Chinese currency, also known as the renminbi, is now 0.29 percent stronger than its initial post-revaluation level. China's central bank repeated in its first research report on financial stability released on Monday that China would only gradually push ahead with reform of the country's exchange rate system while keeping the yuan basically stable.
Dealers believed the Chinese currency was more likely to continue its gradual climb versus the dollar in the long run. But on Tuesday dealers were also concerned about US President George W. Bush's visit to China this month.
US President Bush is scheduled to visit Beijing and meet his counterpart, Hu Jintao, on November 19. On Tuesday the yuan also strengthened against the euro to close at 9.4641 compared with 9.5676 on Monday. The yen ended stronger to close at 6.8548 per 100 yen from 6.8580, the central bank said on its Web site.
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