SHANGHAI: The yuan rose against the dollar on Wednesday after the People's Bank of China set a stronger mid-point amid pressures from the United States for a further appreciation in the Chinese currency. U.S. Treasury Secretary Timothy Geithner said in Washington on Tuesday that China's yuan is rising against the dollar and the United States would like to see that trend continue to aid the global economy. Dealers said such international pressures would do little to influence China's currency policy and that Beijing would only adjust it based on its judgement and economic situation. "Overall, the central bank still has an intention to let yuan rise further, but recent global market is quite unstable, so it may keep the yuan relative steady for a while," said a dealer at a Chinese bank in Shanghai. Indeed, before trade began the PBOC set the yuan's daily mid-point at 6.4718 versus the dollar, only five pips stronger than Tuesday's 6.4723 and largely legging a 0.5 percent fall in the dollar index . Spot yuan traded between 6.4656 and 6.4700 versus the dollar, above the daily mid-point. It was trading at 6.4662, up from Tuesday's close of 6.4704. The Chinese currency has appreciated 5.57 percent since it was depegged from the dollar in June 2010, and 1.91 percent since the start of this year. A further appreciation, albeit a gradual one, is expected by many dealers as the government continues to use the foreign exchange rate to help fight imported inflation. To help curb stubbornly high pressures, China's central bank has already pushed the yuan to a series of record highs versus the dollar this year by setting its daily mid-point against the U.S. currency at successive peaks. Benchmark one-year dollar/yuan non-deliverable forwards (NDFs) were bid at 6.3900, little changed from the previous day's close of 6.3930. Their implied yuan appreciation in a year's time edged up to 1.28 percent from 1.23 percent.

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