BEIJING, June 6 (Xinhua) -- The central parity rate of the Chinese currency, the renminbi or yuan, strengthened 296 basis points to 6.5497 against the U.S. dollar Monday, according to the China Foreign Exchange Trading System.
The rise was the biggest daily gain since April 29, when the central parity rate of the renminbi strengthened 365 basis points from previous trading.
The gain was mainly due to a weakened dollar index as market expectations for the Federal Reserve's interest rate increase fell following lower-than-expected May employment data released Friday.
The U.S. total non-farm payroll employment increased by 38,000 in May, well below market expectations and the lowest number of monthly job gains in almost six years, the U.S. Labor Department reported Friday.
Some analysts believe that a June rate hike is off the table after the disappointing jobs report.
Since August 11, 2015, when China's central bank decided to adjust the "central parity system" to better reflect market development in the yuan-to-dollar exchange rate, the Chinese currency has experienced several rounds of volatile adjustments.
Since the market-oriented rate-fixing reform, daily central parity quotes reported to the China Foreign Exchange Trade System before the market opens are required to be based on the previous day's closing rate of the inter-bank foreign exchange rate market, supply and demand, and price movement of major currencies.
Expectations of a U.S. interest rate hike this summer have pushed up the U.S. dollar and raised the downward pressure on the yuan.
Last week, the yuan slumped against the U.S. dollar to its lowest level since February 2011, after U.S. Federal Reserve chair Janet Yellen hinted at a possible interest rate raise in the next few months.
In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.