Strings are sequences that contain 8-bit characters.
The items of a string are characters. There is no separate character type; a character is represented by a string of one item. Characters represent (at least) 8-bit bytes. The built-in functions chr and ord convert between characters and non-negative integers representing the byte values. Bytes with the values 0-127 usually represent the corresponding ASCII values, but the interpretation of values is up to the program. The string data type is also used to represent arrays of bytes, e.g., to hold data read from a file.
(On systems whose native character set is not ASCII, strings may use EBCDIC in their internal representation, provided the functions chr and ord implement a mapping between ASCII and EBCDIC, and string comparison preserves the ASCII order. Or perhaps someone can propose a better rule?)