SPECULATION that the central bank will accelerate gains to ease inflation pushed the yuan to its highest level against the dollar since 2005.
Consumer price increases last month slowed to 7.7 percent, a report showed yesterday, as the yuan's appreciation quickened since April, making imports cheaper.
Premier Wen Jiabao pledged last month that the government would step up controls on prices as it sought to lower inflation without derailing growth.
"Continued price pressure would imply continued yuan appreciation," Emmanuel Ng of Oversea-Chinese Banking Corp in Singapore told Bloomberg News. There has been "no indication of a drastically slowing economy."
The currency climbed 0.16 percent to 6.9075 per dollar as of 5:30 p.m. in Shanghai, from 6.9184 yesterday, according to the China Foreign Exchange Trade System. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of a reference rate set at 6.9015 yesterday.
China's export growth unexpectedly accelerated in May, easing concern that a stronger yuan and a slowdown in global demand would hurt domestic expansion. The trade surplus was US$20.2 billion, swelling from US$16.7 billion in April, according to the report.