Chinese yuan strengthens to three-month high against USD Wednesday
BEIJING, May 17 (Xinhua) -- The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 155 basis points to a three-month high of 6.8635 against the U.S. dollar Wednesday.
Analysts attributed the yuan's rally to the weaker global trend of U.S. dollars which is in contrast with the strengthening euro.
The yuan is also supported by a slew of upbeat economic data pointed to latest restructuring achievements and provided fresh stabilization signs for the Chinese economy, said analysts.
Judging from recent capital flow trend, the yuan may continue to appreciate for a while, they said.
Globally, the U.S. dollar wobbled following a series of below-par economic results out of the United States, including a surprise decline in homebuilding.
On the other hand, the euro is strengthening as updated data confirmed that the eurozone economic growth meet expectations and political concerns are easing.
In addition, the approval of a bond connect program between the Chinese mainland and Hong Kong also boosted the market.
Investors on both sides will be able to trade bonds on each other's interbank markets under the program. Northbound trade will be launched first, without caps on investment volume.
The new program will encourage overseas investors to hold more yuan-denominated assets, said a report of China International Capital Corporation Limited (CICC).
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, according to the China Foreign Exchange Trade System.[ Editor: Xueying ]