China's yuan weakens for seventh day against U.S. dollar

Special Report:Global Financial Crisis

BEIJING, March 4 (Chinese media) -- China's yuan weakened against the U.S. dollar

for a seventh straight trading day Wednesday.

The central parity rate of the yuan was 6.8395 per dollar Wednesday, and

6.8392 yuan per dollar the previous trading day.

The currency is allowed to float on the interbank market within a

0.5-percent band, which is set daily by the People's Bank of China.

The yuan so far has weakened by 58 basis points against the dollar over the

past seven trading days.

"It is only normal that the yuan weakens against the U.S. dollar in such a

time when currencies such as euros, pounds, and Australian dollars are all

weakening against the U.S. dollar," said Zuo Xiaolei, Chief Economist with China

Galaxy Securities Company Ltd.

The dollar index, a gauge of the greenback's strength against a basket of

key currencies, rose 0.98 percent to 89.026 Tuesday, its highest since April

2006, according to a Reuters report.

Zuo said a 58 basis-point rise of the dollar against the yuan was small and

was common on the foreign exchanges market.

She also said the dollar's rise amid plunging global stock markets was a

reflection of the fundamental strength of the U.S. economy compared to other

economies.

Analysts say fears about the sliding world stock markets had prompted

investors to buy the dollar at it is regarded as a relatively safe investment in

times of turmoil.

On the market Wednesday, the yuan's central parity rate was 853.09 per 100

euros. It was also trading at 6.9514 per 100 yen.