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HONG KONG: China’s yuan inched lower but held tight ranges on Wednesday, defying firmer central bank guidance and mostly unswayed by authorities’ efforts to revive the debt-laden property sector through lower mortgage rates.

Traders are also reluctant to make big bets ahead of the release of key economic data in China and the United States.

The People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1816 per U.S. dollar prior to market open, firmer than the previous fix 7.1851 and over 900 pips stronger that Reuters’ estimate.

The spot yuan opened at 7.2768 per dollar and was changing hands at 7.2892 at midday, 96 pips weaker than the previous late session close and 1.50% weaker than the midpoint.

Some Chinese state-owned banks will soon lower interest rates on existing mortgages as Beijing ramps up efforts to revive the debt crisis-hit property sector and bolster a sputtering economy, Reuters reported on Tuesday.

“We are sceptical if this demand side measure is going to have much impact on property given that confidence is extremely weak,” said Maybank analysts in a research note.

The measures come ahead of embattled property developer Country Garden’s first half results on Wednesday, with a net loss of up to 55 billion yuan ($7.55 billion) already flagged to investors.

The market will be assessing just how cash-strapped China’s largest private developer is, after it missed two dollar coupon payments.

The offshore yuan was 0.11% weaker than the onshore spot at 7.297 per dollar.

The yuan has been under pressure due to concerns about the country’s property sector crisis.

The sputtering economic recovery is also weighing on the yuan. The spread between Chinese and U.S. yields reached their widest in 16-years last week, pressuring the currency.

The dollar index rose to 103.601 from the previous close of 103.531.

Investors will be closely watching China’s official purchasing managers’ index for August, slated for Thursday, which is forecast to have contracted for a fifth straight month.

The U.S. personal consumption expenditures price index, the Fed’s preferred inflation gauge, is also due out on Thursday.

Investors also await non-farm payrolls data due on Friday, which they will parse for clues on the outlook for U.S. monetary policy.

Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan’s value, traded at 7.1025, 1.11% away from the midpoint.

One-year NDFs are settled against the midpoint, not the spot rate.

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