Yuan hits high since revaluation in 2005

The yuan closed higher after hitting a fresh post-revaluation high against the US dollar yesterday, with Beijing seen conceding to let the yuan rise as US lawmakers call for a vote on a bill to get tough with China over its slow exchange rate reform.
The People's Bank of China fixed the yuan's mid-point to the dollar at its highest level since the yuan's revaluation in 2005. The yuan has risen 0.8 per cent in four trading days as measured by the fixing, the biggest four-day gain since records of the reference rate started to be kept in 2007.
But dealers said China's looser grip on the yuan might have limits, possibly up to a maximum rise of 3 per cent by the end of the year from June 19 when the PBOC announced a depegging of the yuan to the dollar, in particular as the yuan has already risen more than 20 per cent since 2005.
"China has its own calculations of the yuan's value," said a senior dealer at a state-owned bank.
"US politicians are talking about a yuan undervalued by up to 40 per cent many years ago and they are saying the same [thing] while the yuan has already jumped more than 20 per cent since 2005."
The PBOC set the mid-point, or its reference rate from which the yuan can rise or fall 0.5 per cent each day, at US$6.7378 yesterday, up from Monday's US$6.7509. That guided spot yuan to close at US$6.7463 after touching a post-revaluation high of US$6.7435, up from Monday's close of US$6.7618 and rising 1.18 per cent since the mid-June depegging.