NEW YORK (CNN/Money) - In a move that could trim the trade gap with the United States, China revalued its currency higher against the dollar Thursday and said it would no longer have the yuan tied to a fixed rate against the U.S. currency.

The move, while small at this point, could be the first step to reduce competition for some U.S. companies from lower-priced Chinese imports. A stronger yuan could also increase the revenue U.S. exporters get from sales to the world's largest country, one of the fastest growing consumer markets.

It also reduces the threat that Congress could impose threatened trade sanctions on China.

On the downside for American citizens, it could lead to increased prices for Chinese-made goods such as apparel and electronics.

"The change is pretty slight but very significant because of the fact that they did allow it to revalue .Now speculation is that this will pave the way for further valuations down the road," said Ezechiel Copic, currency analyst for MG Financial Group.

The fixed rate between the yuan and the dollar has been blamed for the soaring trade gap between China and the United States, as it kept Chinese-made goods cheap here.

The trade gap between the United States and China was $72.5 billion the first five months of this year, by far the largest gap of with any trading partner. It was more than the U.S. gap with Japan and OPEC combined during the same period.

Jay Bryson, global economist for Wachovia Securities, said that there is still more unknown than known about the way the new valuation system will work. He doesn't expect it to cause an immediate impact on the economics of that trade, but he said it opens the door to further strengthening of the yuan.

"Will the yuan be 30 percent stronger vs. the dollar a year from now? I doubt that. Could it be 10 percent stronger? Yeah, that's reasonable," he said. "It will help somewhat people who compete against Chinese exporters. It doesn't mean textile jobs will come back to North Carolina, those jobs are gone. But it might help a manufacturer who is still here."

U.S. stock futures soared immediately after the statement from People's Bank of China just after 7 a.m. ET Thursday. But an hour later much of those gains had evaporated after traders had a chance to examine and weigh the statement.

The statement said China will immediately value the currency at 8.11 yuan, down 2 percent from the 8.28 rate previously. It also said it will now peg the yuan against a "market basket" of numerous currencies, although it will keep the yuan in a tight band rather than letting it trade freely. But the central bank did promise that the exchange rate band would be adjusted when necessary according to market developments as well as economic and financial situations.

Reuters quoted another statement from the bank as saying any sharp swing in the yuan's exchange rate would hit China's financial system, and therefore would not be in Beijing's interest.

The U.S. Congress had been threatening to impose stiff trade sanctions on Chinese imports if it did not allow more market-based valuation of the yuan. The move by the Chinese reduces the threat of that kind of trade war, which is one of the factors that likely lifted futures early, said Bryson.

"Obviously they're getting a lot of flak from Congress and the Europeans as well. It was going to happen at some point anyway. It probably happened sooner than it would have if Congress and the administration hadn't said anything," said Bryson.

But University of Maryland Professor Peter Morici, a vocal critic of the Chinese government's policy on currency, said this move doesn't suggest any significant change in the economics of trade is on the horizon.

"This is a fig leaf. It's an attempt by the Chinese to do the least amount possible," said Morici, who estimated that the yuan is about 40 percent undervalued because of the trading restrictions.

"Even a pace of 10 percent change a year will get us there too slowly," he said. "(With this change)China will continue to have very large trade surpluses and cause damage to industries that compete with Chinese companies."