The yuan's exchange rate against the U.S. dollar has strengthened as the dollar falls from a peak.
The yuan central parity rate against the dollar rose 113 basis points to 6.7940 on Thursday, marking a new high since June 16.
Foreign exchange analyst from China Merchants Bank Li Liuyang said that the drop of the dollar is the main reason behind the yuan's rebound, domestic news outlet cs.com.cn reported.
After the European Central Bank President Mario Draghi's talk on Tuesday, the market expects the bank to stop its monetary easing policy. Also, the IMF lowered its growth forecast for the U.S. to 2.1 percent from 2.3 percent, leaving speculation that the U.S. may not raise interest rates as scheduled. The two factors contributed to the drop of the dollar, according to Li.
If the dollar continues to drop amid a robust euro, the yuan may see slight appreciation, said the report.
