The Chinese yuan is set to breach the key 7.0000-per-dollar mark as it hit a high of 7.0020 to the dollar yesterday (Apr. 7). It is the strongest level for the currency since it was revalued in July 2005.
China plans to take advantage of the yuan's appreciation to fight mounting inflation, which hit an 11-year high of 8.7% in February of this year.
Most foreign exchange dealers were surprised as they did not expect the Chinese currency to rise at such a rapid pace.
The chart clearly shows a downward trend for the greenback versus the yuan. As such, technical analysis suggests a "buy" for yuan in the interim.
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