The US dollar had fallen for three trading days against Renminbi or yuan, closing at 8.0916 on September 5, a new low since July 21 when China ended Renminbi's decade-old peg to the US dollar. Renminbi rose 0.0235 percent on September 5, according to report by International Finance News.

Compared to 8.2764 on the inter-bank foreign exchange market on July 21, Renminbi has seen an accrued appreciation of 2.23 percent since its exchange rate reform.

Analyst says, Renminbi's continued rise is mainly due to the lasting weakening of US dollar on the global foreign exchange markets, which has seen a four-month low against UK pound and a three-month low against euro.

The market expectation on the interest rates in the United States has changed, and it is predicted that the Federal Reserve will slow its pace of tightening the credit market and loan due to the huge economic losses caused by hurricane Katrina.

A Shenzhen-based dealer says, if US dollar remains weak, Renminbi is likely to continue to climb, probably to 8.0910.

The inter-bank forward foreign exchange market saw zero deal on Monday.

The one-year forward price of the US dollar against Renminbi closed at 7.8315 on the inter-bank market, showing the market expectation that Renminbi will possibly appreciate 3.2 percent one year later. However the seven-day forward price of the US dollar against Renminbi was quoted 8.10, which indicates the possibility of the Renminbi's fall in the short run.

By People's Daily Online