China's yuan rose against the U.S. dollar on Friday, hovering near a 3-1/2-year high after stronger-than-expected July export data.
Domestic exports in July expanded 23.9% from a year earlier in U.S. dollar value terms, slowing from a 27% surge the previous month, but above a 22.2% rise forecast in a Reuters poll.
The yuan was 0.07% higher at 6.7470 to the dollar as of 0255 GMT, after trading in a range of 6.7466 to 6.7501, not far from a 3-1/2-year peak of 6.7455 hit earlier this week. The currency is on track for its sixth straight weekly gain.
"Export growth continued to support the economy in July. I expect exports to remain strong in the third quarter," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
The massive trade surplus will lend further support to the yuan, he added. Prior to the market opening, the People's Bank of China set the midpoint rate at 6.7904 per dollar, 356 pips weaker than a Reuters' estimate.
The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
Besides the domestic economy, investors are also keeping a close eye on U.S. jobs data due later in the day for clues on the Federal Reserve's policy path.
The dollar, meanwhile, was also weighed by uncertainties surrounding plans to reopen the Strait of Hormuz.
The yuan is up 0.6% against the dollar this month, and 3.7% firmer this year thanks to an export boom and dollar weakness.
The offshore yuan traded at 6.746 yuan per dollar, up about 0.03% in Asian trade. The dollar's six-currency index was at 99.95. - Reuters
