China's yuan rose on Monday to its highest level against the dollar since the July revaluation as its pace of appreciation quickened ahead of Chinese President Hu Jintao's visit to the United States.
The yuan closed at 8.0064 against the dollar, off an intraday high of 8.0022 but up from Friday's close of 8.0111. The currency's recent strength triggered expectations that the yuan could breach the key 8.0000 level this week.
The yuan has gained 0.19 percent in the first six trading days in April, compared with a monthly rise of 0.29 percent in March, 0.27 percent in February and 0.11 percent in January.
It has appreciated 0.85 percent so far this year versus a rise of half a percentage point from the July revaluation to the end of 2005.
"The central bank has apparently allowed the yuan to trade in a wider range recently, partly due to political pressure ahead of Hu's US visit," said a Shanghai-based dealer at a foreign bank.
"The trend is likely to continue in the near term." Dealers said the yuan's recent appreciation was also significant because the dollar was generally strengthening on global markets, hitting a seven-month peak of $1.2333 against the euro last week.
On Monday, one-year onshore yuan forwards were quoted at 7.77 against the dollar, anticipating that the yuan would be 3.0 percent stronger in a year's time.
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