SHANGHAI (REUTERS) - The Chinese yuan set a new peak against the US dollar on Monday afternoon after the central bank guided the currency up through a record high guidance rate in the morning, as traders shrugged off negative export data.

The yuan changed hands at 6.1088 per US dollar at 4.08pm local time, its strongest rate since Aug 16, when it traded at 6.1090. It backed off briefly, then firmed again to 6.1073 a few minutes later.

The People's Bank of China fixed the yuan midpoint - the rate from which the traded rate is allowed to diverge by 1 per cent in either direction - at 6.1406 per US dollar at the market open, the highest it has been since China created its domestic foreign exchange market in 1994. The setting followed disappointing export data, which showed a year-on-year decline of 0.3 per cent in September, confounding market expectations for a rise of 6 per cent and marking the worst performance in three months.

Some have expressed concern that the strength of the yuan is damaging China's export competitiveness even as the global economic recovery remains in doubt. But traders and economists argued that September's export figures are not as negative as they seem given distorted base effects caused by rampant false invoicing in the service of currency speculation last year.