China's yuan ends at new record high against US dollar

SHANGHAI (AFP) - China's currency ended at a record high against the US dollar for the second straight day on Wednesday, in what analysts said could be a response to US criticism over claims the yuan is vastly undervalued.

The yuan has strengthened around 2 per cent against the greenback since the end of July, ahead of the US presidential election and amid growing confidence in the Chinese economy, which has shown signs of bottoming out.

The yuan, which trades in a tightly controlled band, ended at 6.2372 to the US dollar on Wednesday, marking the strongest finish since 1994, when the country launched its modern foreign exchange market. It closed at 6.2405 yuan to US$1 on Tuesday.

Analysts say China may be allowing the yuan to appreciate to defuse criticism that the unit is grossly undervalued, ahead of the US elections on Tuesday and an upcoming US government report on exchange rates.