CHINA’S yuan hit a three-month high against the U.S. dollar yesterday as China and United States started their annual Strategic and Economic Dialogue, which will help set the tone for relations between the world’s top two economies in the coming year.

    The yuan strengthened to 6.1940 versus the U.S. dollar, its strongest level since April 9, shortly after the market opened. The People’s Bank of China set the daily reference rate — the center of a permitted daily trading band — at 6.1565 early yesterday, compared with 6.1626 Tuesday.

    This week’s move below 6.2000 may lead to further strength in the near future, traders said. A lower number means a stronger yuan.

    “The central bank may allow the yuan to return to appreciation in the third quarter as a stabilizing domestic economy will significantly reduce the need for a weaker currency,” said Liu Dongliang, a senior analyst with China Merchants Bank. “The yuan may rise back to around 6.15 by the end of September.”

    In a move that surprised markets, the government pushed the yuan to weaken earlier this year, and in April the currency hit its lowest level in 18 months. Investors also soured on the yuan as China’s economy slowed.

    The yuan remains down 2.3 percent against the U.S. dollar in 2014, ranking it among Asia’s worst performers.

    The yuan’s gains yesterday came a day before China is due to release data that showed more improvement in its exports. China’s exports likely rose 10 percent in June from a year earlier, picking up from a 7 percent increase in May, thanks to recovering external demand. (SD-Agencies)