Yuan Rises to Highest Since End of Peg as China Curbs Inflation

From Bloomberg:

The yuan climbed to the highest since a dollar link was abolished in 2005 on speculation that China will quicken gains to damp . Bonds fell.

The central bank has allowed the yuan to gain 5.3 percent against the dollar this year, approaching the 7 percent advance in 2007. Premier Wen Jiabao pledged last week that the government will step up controls on price increases after inflation reached an 11-year high of 8.7 percent in February.

“The policy thrust for yuan appreciation will remain unchanged as an offset to inflation,” said Yen Ping Ho, a currency strategist at JPMorgan Chase & Co. in Singapore. “Curbing inflation is still a crucial government objective.”

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