Bearish undertones continued to plague the US dollar during the New York session following rather lackluster US economic reports.

Rumored in the overnight, officials at the China Insurance Regulatory Commission have mulled over allowing asset management branches of insurance companies to double their investment in local equities.

Rhetoric from the EU supported yuan bidders as comments by EU Trade Commissioner Peter Mandelson prompted speculation of retaliatory sanctions by the conglomerate economy.

Boosting the Chinese yuan to another record at 7.5773 in the overnight, the market couldn’t help but notice that China’s surplus widened far past any expectation for the month. In June, China’s trade surplus with global partners widened to an impressive $26.9 billion according to the customs bureau.

With the Canadian dollar gaining an impressive 1300 pips, or 12 percent, against the US dollar in the first half of the year, many are wondering how much further the pair can decline.

The Chinese yuan remained under pressure today trading at 7.6035, as new and revised policies were announced helping to keep traders wary of two way trading in the underlying currency.

Rising by the most in six months, stocks in China’s benchmark index rebounded from yesterday’s massive losses.

For the second straight session, the Chinese yuan pared previous gains as market concern emerged over the possible two way trade of the underlying currency.

The Chinese yuan gained 0.11 percent, to close at 7.6047, its highest close since 2005, on speculation that China is letting the yuan appreciating to gain more control over price pressures.

Today, the Shanghai composite index, China’s main stock market index, fell by nearly 4 percent to 3,914.2, amid concern that the PBOC may have to increase the benchmark interest rate to control the existent price and wage pressures.