The Chinese currency Renminbi, or the yuan, strengthened 108 basis points to 6.3772 per U.S. dollar on Wednesday, a fresh high since the reform of the yuan's exchange rate formation mechanism, according to the China Foreign Exchange Trading system.

Global financial markets experienced another day of turmoil on Tuesday after credit ratings agency Standard & Poor's downgraded Italy late on Monday night, adding more uncertainties into the Europe's debt woes.

Meanwhile, real estate remained quite weak in the United States as its new residential construction was below expectation, which contributed to weakening the dollar.

In China's foreign exchange spot market, the yuan is allowed to rise or fall by 0.5 percent from the central parity rate each trading day.

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