The Chinese yuan will likely appreciate at a faster pace this week amid market speculation of another interest rate rise following acceleration of economic indicators in May.

Analysts said the stronger economic data will prompt the central bank to apply further tightening measures to prevent the world's fourth-largest economy from overheating.

The currency closed at 7.6246 against the United States dollar on Friday, up from 7.6550 a week earlier. The central bank set the central parity, an indicator of market views on the yuan's movements, at 7.6238 on Friday. The yuan has appreciated 7.9 percent since the decade-old fixed exchange rate of 8.28 to the US dollar was abandoned on July 21, 2005.

Premier Wen Jiabao last week signaled the likelihood of more tightening moves to prevent the economy from overheating.

Inflation grew 3.4 percent in May, the fastest pace since February 2005. Industrial output jumped 18.1 percent, the fastest pace in three months. Exports surged 28.7 percent, raising the monthly trade surplus to US$22.5 billion, up 73 percent from a year earlier.

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