Chinese yuan strengthens to new high against US dollar

BEIJING -- The central parity rate of the Chinese currency, the yuan, strengthened for the seventh working day to a 15-month high against the US dollar Tuesday.

The central parity rate of yuan strengthened 298 basis points to 6.537 against the US dollar Tuesday, the strongest level since May 2016, according to the China Foreign Exchange Trade System.

The adjustment came after a rise of 241 basis points Monday, and 101 basis points Friday, when the rate hit below 6.6 for the first time since June last year.

The dollar index against a basket of six major currencies was steady at 92.63 on Tuesday after losing 0.2 percent the previous day.

The rise of Chinese currency is on the back of a firming Chinese economy, said Wen Bin from China Minsheng Bank.

China's economy expanded 6.9 percent in the first half, well above the target of around 6.5 percent for the year.

China's manufacturing activity expanded for the 13th consecutive month in August, providing fresh evidence of a firming Chinese economy.

China's service sector growth accelerated in August, hitting a three-month high, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

The Chinese yuan will continue its momentum given a slew of positive economic indicators in coming months that will inject fresh impetus to the economy, according to Sheng Songcheng with the central bank.

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.