Yuan Hits New High As Dollar Weakens

The yuan hit a new high of 6.6997 against the U.S. dollar on Tuesday, the highest level since June 19 when China pledged to make the mechanism governing the yuan’s exchange rate with other currencies more flexible

The yuan has risen for eight consecutive days amid pressure from the U.S. for faster appreciation. It has gained 1.9% against the US dollar since June 19.

However, Beijing continued to make clear that it was not acceding to foreign pressures for a faster rise.

“Recently, there are some discordant voices in the U.S. criticizing the yuan exchange rate, and saying it would adopt any possible means to press for yuan appreciation,” said a statement on China’s Foreign Ministry website. “It is unwise and also near-sighted.

“The trade imbalance between China and the US is not decided by the exchange rate but by globalization. Yuan appreciation cannot solve the US trade deficit, a point on which the Americans have also reached consensus.”

President Barack Obama said Monday that China had not done enough to raise the yuan’s value and claimed the currency “is valued lower than market conditions would say it should be”.

“They have said yes in theory, but in fact they have not done everything that needs to be done we are going to enforce our trade laws much more effectively than we have in the past,” Obama told a town-hall style meeting hosted by CNBC television.

U.S. shipments to China, its third largest export destination, grew rapidly in the first seven months of this year, up 36% from a year earlier. That compares to the 21% growth in China’s exports to the US over the same period.

Obama made the remarks ahead of a meeting with Premier Wen Jiabao at the upcoming United Nations General Assembly in New York, in which the exchange rate and trades issues are expected to be high on their agenda.

BEIJING (China Daily)