China's currency hit a new high against the American dollar on Wednesday amid rising and raucous calls in the United States' congress to increase the value of the yuan more quickly.

Before trading started on Wednesday morning, the People's Bank of China set the midpoint at 7.6282, breaking the 7.63 barrier for the first time since China ended the peg to the US dollar on July 2005. The yuan is allowed to move 0.5 percent up or down the midpoint in a day.

A Chinese man pulls some yuan notes from his wallet. [AFP]

The record high central parity rate came after the yuan posted the largest daily gains in two years, rising 0.26 percent to 7.6436 against US dollar on Tuesday.

Analysts attributed the faster appreciation partly to a due US Treasury Department report scheduled to be released Wednesday. The semi-annual evaluation of exchange-rate manipulation may increase pressure for faster revaluation, according to analysts.

Hours after the report is unveiled, US lawmakers plan to introduce legislation to push China to loosen controls on the yuan, reports said.

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The analysts also pointed to two other factors: The Consumer Price Index, a key measure of inflation, hit a two-year high of 3.4 percent in May, raising the possibility of an interest rates hike, and the country's trade surplus soared 73 percent to US$22.45 billion in May.

They expect the yuan to breach the 7.60 mark against the US dollar at the end of month as the US increases pressure. Some US lawmakers and businesses accuse China of keeping the yuan artificially low to give its exports an unfair advantage.

Concerned about rising tensions with major trading partners, as well as a potential slump in world economy, which will result in fewer demands for Chinese products, China has been taking measures to boost domestic consumption to reverse the over-reliance on exports.

In May, China's retail sales rose 15.9 percent from a year earlier to 715.8 billion yuan, the fastest pace in three years, said the National Bureau of Statistics on Wednesday. The increase came on top of a 15.5 percent gain in April.

The growth was mainly driven by rising incomes and a booming stock market which has soared more than 50 percent so far this year after a 130 percent rally in 2006.

Sales in the country will grow about 14 percent this year, the Ministry of Commerce said earlier this month. China will probably surpass Japan by 2010 to become the world's second-largest consumer goods market after the US, Vice Premier Wu Yi said on May 24.