China's yuan on Tuesday retreated, after having staged its largest single-day rise against the dollar since its revaluation on Monday, as the US currency extended gains on global markets.
The yuan closed at 8.0141 versus the US currency, weaker than Monday's close of 8.0077, after the central bank set the yuan's mid-point at 8.0148 on Tuesday morning compared with the previous mid-point of 8.0096.
"What we saw today was a rebound in line with the stronger dollar, but the yuan's movement today was quite limited," said a Shanghai-based trader.
The Chinese currency weakened 0.08 percent, reversing some of Monday's 0.19 percent rise, when the yuan staged its biggest single-day percentage gain since Beijing revalued the currency by 2.1 percent and freed it from a dollar peg last July.
Its previous biggest daily rise was on May 31 this year, when it climbed 0.18 percent.
The yuan, which is allowed to rise or fall 0.3 percent from its mid-point versus the dollar each day, should continue to trade above 8.1 in the coming days, a trader said.
Traders attributed the weaker yuan to overall strengthening of the dollar, which extended a recovery from one-year lows against the euro on Tuesday after comments from Federal Reserve Chairman Ben Bernanke fuelled expectations for another interest rate rise in June.
The yuan briefly broke through the key 8.0000 level to touch 7.9972 on May 15, its strongest level in a dozen years.
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