China's yuan strengthens, while U.S. Senate debates bill

China's currency has kept on strengthening amid stubbornly weak recovery of the Western developed economies, and the necessity to rein in an elevated inflation at home.

And, the U.S. Senate is debating a bill sponsored by unemployment conscious Democratic senators who have called for punitive legislative efforts to pressure Beijing to appreciate its currency, the yuan, against the greenback.

The People’s Bank of China, the central bank, on Tuesday made the official medium trading price at 6.3483 yuan against one U.S. dollar, a record high ever since China initiated reforming its foreign exchange formation mechanism in July 2005. It is the first time that the rate has broken the 6.35 yuan benchmark.

Chinese analysts predict that the yuan will continue to gain in exchange rates with major currencies, including the U.S. dollar, the euro and the Japanese yen, thanks to China’s relatively stronger economic performance that has attracted a flurry of credit inflows to the country since the eruption of the 2008 global financial crisis.

And, as China’s consumer price index, or inflation, has maintained at more than 6 percent in the past few months and has shown no signs of abating, Beijing has pinned hope on currency appreciation to combat waves of steady price rises.