The yuan is set to rise this week on continued weakness in the US dollar, and China´s 12-year high inflation data will also be a contributing factor.

The Chinese currency finished at 7.0894 to the greenback last Friday, up from 7.1059 a week earlier. The yuan rose to an intraday high of 7.0844 against the greenback on Friday, the strongest since China scrapped the currency´s peg with the US dollar in July 2005.

The yuan climbed as the US currency touched a record low against the euro last Friday on concerns increasing credit-market losses will push the world´s biggest economy into a recession.

China´s statistics bureau reported last Tuesday inflation worsened to 8.7 percent in February against 7.1 percent in January.

The People´s Bank of China, the central bank, has said the yuan will be one of many weapons in the fight against inflation.

Source:Shanghai Daily