The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 174 basis points to 6.8632 against the U.S. dollar Wednesday, according to the China Foreign Exchange Trade System.
The U.S. dollar strengthened on Wednesday after Federal Reserve Chair Janet Yellen signalled a faster pace of U.S. interest rate increases at her two-day testimony before Congress.
Yellen told the U.S. Senate Banking Committee that the central bank would likely need to raise interest rates at one of its upcoming meetings, although she expressed caution amid uncertainty over economic policy under the Trump administration. Nevertheless, the yuan stood tall Wednesday supported by favorable key economic data.
China's producer prices rose faster than expected in January while consumer inflation quickened, reinforcing views that economic growth is firming up.
Data with the central bank showed that Chinese banks extended 2 trillion yuan (about 295 billion U.S. dollars) of new yuan loans in January, up from 1 trillion yuan a month ago, which was seen as a sign for a warming economy.
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 U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
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