Chinese yuan strengthens to new high against USD

BEIJING - The central parity rate of the Chinese yuan hit a new high against the US dollar Thursday, as the dollar weakened.

The yuan strengthened 60 basis points to 6.2822 against the US dollar Thursday, according to the China Foreign Exchange Trade System, marking the highest level since Aug 11, 2015.

The yuan's performance beat market expectations, reflecting the sound fundamentals of China's economy, said analysts.

The dollar index, measuring the US currency against six other major currencies, fell 3.4 percent in January.

China's foreign exchange reserves rose for the 12th straight month to reach $3.16 trillion at the end of January, official data showed Wednesday.

A statement from the State Administration of Foreign Exchange attributed the increase to stronger non-dollar currencies and higher asset prices.

The administrators predicted a more balanced forex supply and demand, noting that the yuan's exchange rate would see more "two-way movement."

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.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.