China's yuan weakened against the dollar on Thursday for the second consecutive day as more domestic import and export firms bought dollars, dealers said.
The yuan's fall also came after Beijing and Washington stepped up their war of words on whether China should allow the yuan to rise faster ahead of Chinese President Hu Jintao's planned formal visit to the United States in the coming month.
The yuan ended at 8.0268 to the dollar, compared with Wednesday's close of 8.0259, after the central bank set the yuan's daily mid-point exchange rate at a weaker 8.0270 from Wednesday's mid-point of 8.0280.
The yuan has now appreciated a further 1.03 percent since it was revalued by 2.1 percent to 8.11 per dollar in July, and freed from a dollar peg to float within managed bands.
"Every month-end, export and import companies demand foreign exchange for their trade business, and they mostly buy dollars and sell the yuan," said a forex dealer at a major US bank in Shanghai.
"The market is also concerned about recent arguments on the currency between China and the United States before Hu's visit."
The yuan touched a post-revaluation high of 8.0205 on Tuesday after gaining more than half a percentage point since early February, compared with 0.11 percent in January and 0.49 percent for nearly six months right after its revaluation.
In Washington, Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, and Sen. Max Baucus, a Montana Democrat, proposed on Tuesday a law pushing the Bush administration to act more aggressively on China's currency policy.
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