The Chinese currency Renminbi, or the yuan, strengthened 137 basis points against the greenback on Wednesday, with the central parity set at 6.3623 per U.S. dollar, according to the China Foreign Exchange Trading system.

Dealers said the market sentiment is improving as the U.S. and European stock markets rallied for a second day running Tuesday on hopes that leaders are preparing a major response to the eurozone debt crisis.

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.