China's yuan rebounded against the dollar in the spot and forwards markets on Thursday as the US currency's global rise stalled, and after the Chinese central bank again signalled that it did not want the yuan to enter a downtrend.
Although the central bank appeared to stay out of the spot market on Thursday, several dealers said they suspected it intervened indirectly in late trade on Wednesday to support the yuan and head off a sharp drop that could have encouraged capital outflows from China.
And before trade began on Thursday, the central bank set the yuan's daily mid-point at 6.8410 against the dollar. That was down slightly from Wednesday's reference rate of 6.8398, but up from Wednesday's spot close of 6.8434. Since mid-July, the central bank has used its mid-point system and indirect intervention to limit the yuan's fall against the dollar to just 0.5 percent, compared to a nearly 10 percent jump by the dollar against a basket of major currencies.
"Given the dollar's strength in global markets, the yuan's performance over the past several weeks reflects painstaking efforts by China to keep its currency stable," said a dealer at a North American bank in Shanghai.
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