(Yicai Global) Sept. 4 -- The central parity rate of the yuan (CNY) against the US dollar (USD) declined 241 basis points before the opening of interbank market on Monday, the largest increase in three weeks.

The China Foreign Exchange Trade System (CFETS), the interbank trading and foreign exchange division of China's central bank, the People's Bank of China (PBOC), set the yuan central parity rate at 6.5668 against the dollar on Monday, compared with the official close of 6.5679 last Friday. This represents the strongest level the yuan reached against the dollar in more than 14 months.

Both onshore (CNY) and offshore(CNH) yuan broke the threshold of 6.56 last Friday, and the former closed at 6.5596 in the night trading.

The US dollar index pushed higher last Friday despite a weaker-than-expected U.S. jobs report, underlying expectations for a possible third-rate hike by the Federal Reserve this year.

However, the Japanese yen gained against the dollar and other currencies in early trading in Asia on Monday. Dollar fell a further 0.3 percent from the level it reached in late US trading last Friday.

Investors are also reportedly worried about their exposure to higher-risk assets after Democratic People's Republic of Korea (DPRK) conducted its most powerful nuclear test, detonating a hydrogen bomb yesterday.