Yuan hits new high against dollar

It closed at 8.0214 on Monday and has now risen 1.1% against the dollar since being revalued by 2.1% last year.

It follows the visit of two US senators who came to study the value of the yuan and its impact on US-Chinese trade.

They are proposing a bill to impose tariffs of up to 27.5% on some Chinese goods unless Beijing moves to free up its currency.

A crucial vote on the issue is scheduled to take place in the US Senate on Friday.

Trade deficit

Some US politicians and manufacturers believe the yuan is undervalued by 15-40% against the dollar.

They say this makes Chinese exports artificially cheap and led to the huge $202bn (£116bn) trade deficit the US had with China in 2005.

China has ruled out another revaluation since raising the yuan's value last July.

Prior to that, the currency had been fixed at 8.28 yuan to the US dollar for 10 years.

The yuan is allowed to rise or fall by 0.3% each day, from a mid-point set by China's central bank.

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