Yuan lifts to 20-year high against dollar

The yuan firmed to a 20-year high against the US dollar yesterday after the People's Bank of China set the daily reference rate to a record low against the greenback due to surprisingly soft employment data.

The PBOC set the central parity rate at 6.0950 yuan per dollar yesterday, 0.1 percent stronger than the previous day's 6.1008.

It's the highest level since China's foreign exchange reform in 2005, which unpegged the yuan to the greenback.

US employers added 74,000 workers in December, the least since January 2011, which spurred the selling of dollars in the morning.

China's trade surplus with the US will continue to add pressure for the yuan to appreciate, Lian Ping, chief economist at the Bank of Communications, said.

Ma Jun, chief economist for China at Deutsche Bank, predicted the yuan to appreciate 2 percent against the dollar by year-end.

The PBOC, or central bank, fixes the central parity rate every morning and allows the yuan to appreciate or weaken within 1 percent from the reference rate each trading day.