(MENAFN- AFP) China's yuan currency hit a record high against the US dollar on Tuesday, as a recovery in the domestic economy and US political pressure helped the unit strengthen, analysts said.
Trade data released Saturday lifted confidence in the domestic economy, according to analysts, while an expected US government report on exchange rates may be prompting the central bank to guide the yuan higher.
The yuan touched an intra-day high of 6.2262 to the dollar, according to the China Foreign Exchange Trade System, marking the strongest level since China launched its modern foreign exchange market in 1994.
It also registered a record closing high of 6.2265, firming from Monday's close of 6.2291.
"China's economic recovery, albeit weak, may attract foreign capital to put investment in yuan-denominated assets, driving demand for the currency," a Beijing-based foreign exchange analyst, who declined to be named, told AFP.
China's exports rose 11.6 percent in October, according to official data, accelerating for a second straight month in fresh evidence of a broader rebound for the world's second-largest economy.
The nation's trade surplus, a source of friction with the United States and other countries, widened to $32 billion, up from $27.7 billion in September.
"Recent data showed the worst may have come and gone for the domestic economy," Industrial Bank analyst Jiang Shu told AFP.
"There are expectations that US quantitative easing will proceed as previously scheduled after President (Barack) Obama's re-election, leading to a weakening dollar and creating room for (yuan) appreciation," he said.
Chinese authorities may also be prompting the yuan higher in a gesture to appease criticism that the unit is vastly undervalued, ahead of an upcoming US exchange rate report, Jiang said.
The US Treasury Department issues a semi-annual report on exchange rate policies that addresses China, among other countries.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.