Chinese Yuan Soars To 4-month High Against Dollar

Friday in Asia, the Chinese yuan climbed to a 4-month high against the U.S. dollar as China's stocks rose on the first day of trading this month, driving the Shanghai Composite Index to its biggest gain in five weeks, on evidence the global economy is recovering.

The Shanghai Composite Index is currently up 87.71 points, or 3.2 percent, to 2,867.13, the biggest gain since September 3.

Markets in mainland China open today after an eight-day holiday. An index of Hong Kong-listed Chinese shares has risen 5 percent during that period as signs of growth prompted Australia to raise interest rates and a report showed U.S. service industries expanded.

During early Asian deals on Friday, the Chinese yuan gained against the dollar and reached a 4-month high of 6.8250 at 9:40 pm ET. Although the yuan slipped thereafter, it rebounded shortly and the pair is currently worth 6.8257. If the Chinese currency advances further, it may target the 6.822 level.

The Chinese yuan strengthened to 10.0448 against the euro in early Asian trading on Friday. On the upside, 10.01 is seen as the next target level for the Chinese currency.

The People's Bank of China has set today's central parity rate for the dollar-yuan pair at 6.8270 and the euro-yuan pair at 10.0807.

In the upcoming European session, the German final CPI for September, trade balance for August, French and the Italian industrial production - both for the month of August are expected to influence trading.

From the U.S., the trade balance report for August has been slated for release in the North American session.