The Chinese currency, the yuan, recorded its second high in as many days on Wednesday against the weakening dollar, breaking the 7.03 mark.

The central parity rate of the Renminbi rose 184 basis points from Tuesday to touch 7.0252 per dollar, according to the China Foreign Exchange Trading System.

The yuan has risen about 4 percent against the dollar so far this year.

The dollar, meanwhile, has been undermined by several developments. The US Consumer Confidence Index for March, released on Tuesday, dropped to 64.5 points, the lowest since the start of the Iraq War in 2003.

Recession fears and negative economic statistics have ended the dollar's recent, short-lived rebound, and more investors wanted to hold the steadily appreciating yuan, analysts said.

Ha Jiming, chief economist with the China International Capital Corporation said that the appreciation of the yuan would help curb inflation in China but might not be very effective, since the rise of global product prices and US monetary policies also had an effect.

China's consumer price index, the main inflation indicator, rose to 8.7 percent in February from a year earlier, a 12-year high.