China’s yuan strengthens to new high against US dollar

The central parity rate of the yuan hit a new high against the US dollar Thursday, as the dollar weakened.

The yuan strengthened 60 basis points to 6.2822 against the US dollar Thursday, according to the China Foreign Exchange Trade System, marking the highest level since August 11, 2015. The yuan’s performance beat market expectations, reflecting the sound fundamentals of China’s economy, said analysts.

The dollar index, which measures the US currency against six other major currencies, has declined 3.4 percent in January.

Following the strong fixing, onshore yuan weakened to below the 6.34 per dollar mark at one point on Thursday, depreciating more than 1 percent – the biggest single day depreciation since August 2015, according to financial news site wallstreet. cn.

China’s foreign exchange reserves rose for the 12th straight month to reach $3.16 trillion at the end of January, official data showed Wednesday.

A statement from the State Administration of Foreign Exchange attributed the increase to stronger nondollar currencies and higher asset prices. The administrators predicted a more balanced foreign exchange supply and demand, noting that the yuan’s exchange rate would see more “two-way movement.”

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.