Yuan strengthens as investors move currency into country

China's currency strengthened to a 30-month high against the US dollar on Wednesday, driven by capital flows into the country, with its improving economic fundamentals expected to provide solid support.

The yuan's daily reference exchange rate set by the central bank appreciated to 6.2882 per dollar on Wednesday, the strongest since Aug 11, 2015. The onshore and offshore spot exchange rates both hit record highs on the same trading day, according to China Foreign Exchange Trade System data.

"Most of the yuan's strengthening against the US dollar has been because of the general weakening in the greenback," said Louis Kuijs, head of Asia Economics at the Oxford Economics think tank, who raised the forecast of the yuan's exchange rate to 6.32 per dollar by the end of 2018 compared with 6.41 in his previous forecast.