US manufacturers claim the cheap yuan threatens American jobs

The yuan stood at 7.5596 against the dollar, 7.28% higher than its value in July 2005 when the government ended its fixed exchange rate policy.

Analysts said the currency had been lifted by China's decision to raise interest rates last week.

China is under pressure to allow the yuan to appreciate more quickly, as its trade surplus with the US soars.

US lawmakers claim that Beijing keeps the currency much weaker than it should be to boost exports at the expense of US firms.

Currency spotlight

US Treasury Secretary Henry Paulson is set to visit Beijing next week form talks with president Hu Jintao and his deputy Wu Yi.

Mr Paulson has vowed to discuss long-standing issues which include greater flexibility of the Chinese currency.

"The mid-point has pushed the yuan to appreciate a little faster. Henry Paulson's visit could have led the central bank to set the mid-point at the record," one trader at a major Chinese bank said.

The yuan is allowed to rise or fall by 0.5% each day, from a mid-point set by China's central bank.

Meanwhile, the strong yuan and hopes of better than expected corporate earnings also helped the Chinese stock market to close near record highs.

The Shanghai Composite Index closed 113.64 points, or 2.7%, ahead at 4,323.97 - just below record highs of 4,334.92 points set on 29 May.