The Chinese currency renminbi, or the yuan, rose to a new record high against the US dollar on Friday.

The yuan strengthened 106 basis points to reach 6.1050 per US dollar, the strongest since July 2005, [HongKong Richful  - Hong Kong Company Formation, Offshore Company Incorporation]when the country launched reforms of the exchange rate mechanism, according to the China Foreign Exchange Trading System.

On Thursday, the People's Bank of China (central bank) set the dollar-yuan central parity rate at 6.1156.

Before Friday, the yuan's highest exchange rate against the US dollar was set on Dec 11, [HK Corporate Registration]when the yuan stood at 6.11 against per US dollar.

The yuan strengthens to new high against the US dollar, though the dollar climbed against most major currencies overnight in New York.

The US dollar's strong performance came after the Labor Department said Thursday that the number of Americans who initially applied for jobless benefits dropped 42,000 to 338,000 in the week ending Dec 21.

Also on Thursday, the US 10-year Treasury yield pierced through 3 percent for the first time since September as the economic environment turned safer, which limited dollar's gains.

In China's foreign exchange spot market, the yuan is allowed to rise or fall by 1 percent from the central parity rate each trading day.

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