The Yuan traded at a new high, because China raised their interest rates again.

China’s yuan traded near its highest level in 17 years after the central bank raised interest rates for the third time since mid-October, spurring speculation policy makers will permit more gains to counter inflation.

The benchmark one-year lending rate was raised to 6.06 percent from 5.81 percent from today, the People’s Bank of China said yesterday. The one-year deposit rate was increased to 3 percent from 2.75 percent. The monetary authority set the reference rate for yuan trading at 6.5850 per dollar, the strongest level since a dollar peg was ended in July 2005.

Bloomberg's claim the dollar peg ended is pretty much a joke. China is not floating their currency, that's just a re-peg, allowed to fluctuate within a small limit.

From Xinhuanet:

On China's foreign exchange spot market, the yuan can rise or fall 0.5 percent from the central parity rate each trading day.

The central parity rate of the RMB against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day.

This will help reduce imports from China, Asia a tad, but every bit helps.

Amazingly enough, many in the press do not realize other countries are pegged to the Yuan. Economist Dean Baker: