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Chinese yuan hits high against U.S. dollar
www.chinanews.cn 2006-02-25 17:16:40
(Source: CRI/Agencies)
Feb. 25 - China's currency rose Friday to its highest closing level
against the U.S. dollar since a revaluation last July, after the biggest
one-day drop in the opening dollar/yuan parity rate this year. The yuan's
advance pushed up property shares and reinforced currency traders' views
that the central bank is letting the yuan rise faster than before. The
stronger yuan boosted buying of property shares on China's stock markets.
The benchmark Shanghai Composite Index climbed 0.6 percent to 1,296.87.
The Shenzhen Composite Index rose 0.8 percent to 316.31. "Hopes for
further yuan rises this year boosted interest in property shares, and
this buying interest isn't likely to cool off in the near term," said
Fang Yan, an analyst at Guosen Securities. The dollar closed at 8.0424
yuan on the automatic price matching system after trading in a range of
8.0423, it's lowest level since the July 21 revaluation, and 8.0435. On
Thursday, it closed at 8.0480. The yuan's renewed gains preceeded a visit
to China by the U.S. Treasury's undersecretary for international affairs,
Tim Adams, who is scheduled to arrive in Beijing Sunday. In July, China
revalued the yuan by 2.1 percent against the dollar and began linking its
value to a basket of currencies, instead of just the dollar. But Beijing
limits the yuan's daily movements to within 0.3 percent above or below
its opening level. Since July, the yuan has risen only 0.83 percent
against the dollar. Washington has urged China to let the yuan strengthen
faster. Critics of Beijing's currency policy argue that it is
undervalued, giving Chinese exporters an artificial advantage that
contributes to its trade surplus, which rose last year to $201.6 billion,
the largest deficit the United States has ever incurred with a single
country. The Treasury Department has suggested it could label China a
currency manipulator in a biannual report slated for release April, when
Chinese President Hu Jintao is scheduled to visit the U.S. In share
trading, China Vanke A shares rose 1.1 percent to 5.61, Gemdale Corp.
advanced 5.4 percent to 7.99 and China Merchants Property Development
added 5.6 percent to 11.98. "The yuan rise is good, not only for property
companies but for all yuan-denominated assets, including A-shares," said
Chen Huiqin, an analyst at Huatai Securities. Speculation about further
rises in the yuan will continue to attract fresh inflows of money to
China's stock market this year, she forecast. Large-capitalized blue
chips, which are institutional investors' favorites, ended higher.
Shanghai Pudong Development gained 1.6 percent to 12.19 and China United
Telecommunications added 0.7 percent to 2.72.
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