Renminbi sets 17-year high for second time in July

China’s currency reached its strongest level in 17 years on Wednesday, as the central bank set the renminbi’s reference rate at a record high and the dollar plummeted in global markets due to US default concerns, Bloomberg reported. The People’s Bank of China set the daily fixing rate at 0.05% stronger against the dollar at 6.447; the currency traded as high as 6.4376 per dollar mid-day. The renminbi has increased 0.3% this month alone, and already set a 17-year high of 6.4556 on July 21 – a record that was overturned today. The Dollar Index traded in New York dropped for the second consecutive day on market concerns about a political stalemate over raising the US debt ceiling. “For the yuan and other Asian currencies, the attention will again move back to inflation,” said Philip Wee, a senior foreign-exchange economist at DBS Group Holdings in Singapore. “The dollar will continue to weaken. Investors need to see fiscal consolidation in the US, not short-term fixes.”