Yuan posts biggest daily gains in two years
(Bloomberg)Updated: 2007-06-13 11:26
China's yuan had the biggest gain since the end of a dollar link in July 2005 as the U.S. Treasury Department prepares to release a report that may increase pressure for faster appreciation.
U.S. lawmakers plan to unveil legislation Wednesday to push China to loosen controls on the yuan, hours after the Treasury publishes a semiannual evaluation of exchange-rate manipulation.
"There is market speculation that China will let the yuan rise faster because of the report on Wednesday," said Guo Zhaoyang, a foreign-exchange analyst at China Everbright Bank in Guangzhou.
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The currency held gains after a government report showed the inflation rate accelerated to a more than two-year high in May. Government bonds declined, with the benchmark 10-year yield rising 7 basis points, 0.07 percentage point, to 4.14 percent.
U.S. lawmakers accuse China of holding down the value of the yuan to spur exports, contributing to a U.S. trade deficit with China.
New York Democrat Senator Charles Schumer will introduce legislation on June 13 that lays out U.S. responses when countries "including China unfairly undervalue their currency," according to a press statement Monday by four lawmakers in Washington.
China reiterated Tuesday that it does not manipulate its currency. "Whether the renminbi is too high or low, this has to be determined by the markets and not any one person or agency," Qin Gang, China's foreign ministry spokesman, said in a regular briefing in Beijing.
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