Source Pravda.Ru

Chine reforms its currency peg

The dollar clawed up from a one-month low against the yen on Monday after weekend comments from Chinese officials clouded the outlook for when the country would loosen the yuan's tight peg to the &to=http:// english.pravda.ru/main/18/88/351/14927_euro.html ' target=_blank>U.S. currency. The dollar fell early against the Japanese currency after the deputy chief of China's foreign exchange regulator, Wei Benhua, said on Sunday the country would "positively but prudently" speed up the reform of its currency peg.

Those remarks came after Zhou Xiaochuan, China's top central banker, told Reuters in an interview there were no serious political or technical obstacles to revaluing the yuan, but the timetable for such a change was still under review, reports Reuters.

Wei also said the country had no timetable for a move and he would not be in favor of a revaluation this year on in early 2006, prompting some players to buy back the dollar, traders and analysts said.

The yen retreated from a one-month high against the dollar in Asia after a report that a &to=http:// english.pravda.ru/main/2002/12/11/40698.html ' target=_blank>Chinese currency official denied speculation the country will allow the yuan to strengthen in 2005.