China's yuan closed on Thursday at its highest versus the dollar since the July 21 revaluation, with dealers saying the central bank's absence signalled a growing but still limited tolerance for the currency's upward march.
The yuan finished at a post-revaluation high for the second consecutive session. It ended the day at 8.0887 versus the dollar, compared with Wednesday's 8.0912, after also hitting an intraday high of 8.0885.
The currency, which was revalued by 2.1 percent on July 21 to 8.11, is now a further 0.26 percent stronger.
Propelled by a strong trade surplus and hard-currency inflow from direct foreign investment, the yuan should see gradual gains in coming weeks, dealers said. But Beijing was unlikely to allow the currency to rise too sharply, too soon.
Thus, the yuan might test 8.0850 per dollar in two or three weeks, but only after easing back near the 8.0900 level in the next few days, dealers said.
The yuan firmed to 7.3065 against 100 yen on Thursday versus 7.3113 on Wednesday and strengthened against the euro to 9.8921 from 9.9469, according to the central bank.