| Yuan set to move in narrow band after gains |
SHANGHAI, June 4 -- The Chinese yuan may move in a narrow range this week after breaking records in recent weeks.
Analysts expect the currency to gain further for the rest of this year as bullish sentiment carries on, led by government austerity measures to soak up excess liquidity.
The currency closed at 7.6465 against the United States dollar on Friday, up from 7.6523 in a week earlier.
The central parity, an indicator of market views on the yuan's movements, was set below the 7.65 mark on Wednesday, the first time after the dollar link was scrapped in July 2005.
The central bank has raised interest rates several times and widened the daily trading band of the yuan to increase flexibility of China's currency regime.
The yuan has appreciated 7.65 percent since the fixed exchange rate of 8.28 to the US dollar was abandoned on July 21, 2005, in favour of a basket of trade-weighted currencies.
Analysts expect more interest rises this year and predicted the yuan may close below 7.5 against the greenback by the end of this year.
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