SHANGHAI: China's yuan edged up against the dollar on Thursday, hitting its highest level in nearly six months, extending a long rally begun in May.
The yuan traded at 6.1340 per dollar on Thursday morning, the strongest the currency has been against the dollar since mid-March.
The yuan is still 1.55 percent weaker than it was in January, before the central bank guided the yuan on a sharp depreciation that saw it lose as much as 3.75 percent by late April.
The People's Bank of China set the midpoint rate at 6.1666 per dollar prior to market open, up 0.05 percent from the previous fix. The spot rate is currently allowed to trade 2 percent above or below the midpoint.
The spot market opened at 6.1398 per dollar, and was changing hands at 6.1355 by midday, 0.09 percent firmer from the previous close.
The spread between the spot rate and the midpoint been widened to 0.50 percent from 0.40 percent at midday on Wednesday, a result of the currency slowly rising while the central bank has kept the midpoint rate at a low level, indicating divergence in views between the market and regulators.
Trade data due to be released on Sept. 8 was a focus market attention, with some traders encouraged to sell dollars, although a Reuters poll showed expectations for slower export
growth in August and a smaller trade surplus than July.
"The market expectation for August trade data is quite positive, thus companies are confidently selling dollars that they hold in hand," said a trader at a foreign bank in Shanghai.
A Reuters poll of 23 economists, however, showed exports in August likely grew 8.0 percent from a year ago, compared with a jump of 14.5 percent in July, while imports were seen growing 1.7 percent, after their 1.6 percent drop in July.
These projections would produce a monthly trade surplus of $40 billion, down from July's $47.3 billion.
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