While the Aussie dollar hit a new 26 month high in early trading yesterday and overnight, the big mover was the Yuan where the rise since the peg to the US dollar was abandoned on June 19, is now almost 2%.
In fact traders said the Chinese currency at one stage reached the highest level in 16 and a half years yesterday.
The Yuan rose for a 10th straight day yesterday in trading around the mid rate set by the country’s central bank.
That’s despite a slightly weaker reference rate being set yesterday when the monetary authority set the Yuan’s reference rate at 6.7098 per dollar, compared with 6.6997 on September 21.
With the US Congress due to vote on Wednesday night, our time on whether American companies should petition for higher duties on imports from China, the country’s rulers are trying to give the impression the currency is rising in value, even if it is incrementally, under tight controls.
The Yuan rose 0.1% to 6.7009 to the dollar from 6.7079 on September 21. Chinese markets were closed from Wednesday to Friday of last week for holidays.
Traders said it had earlier touched 6.6950, the highest level since unified official and market exchange rates started at the end of 1993.
So far the Yuan has rise 1.9% against the US dollar since the central bank ended a two-year dollar peg on June 19.
Meanwhile the Aussie dollar was trading around 96.05 this morning after hitting a new 26 month high of 96.45 US in offshore trading overnight.
That was after it reached 96.25 USc in local trading yesterday.
It later fell to around 95.80, but bounced back to the new 26 month offshore overnight.
The succession of highs took the currency to levels not seen since July 2008.
The dollar has jumped more than 8 USc since August 25.
But while Asian markets all finished up, with gains in China, Japan, Australia Hong kong and other markets, European shares were mixed and Wall Street dropped from four month highs to finish very much in the red.
Gold hit a new closing on Comex in New York of $US1,298.60 an ounce, (up 50c on Friday’s finish) after hitting a high at $US1,301.30, a touch below the record at $US1,301.60 set on Friday.
