China's yuan edged down against the dollar on Tuesday, after the central bank weakened its official midpoint for the second day to reflect an overnight rise in the dollar index. Traders say recent rapid yuan appreciation has led to some profit taking this week, while the People's Bank of China (PBOC) also appears to be intervening through state-owned banks to prevent the yuan from rising too fast.
Spot yuan traded at 6.0872 near midday, down 0.03 percent from the previous close. The PBOC set its midpoint at 6.1373 or 0.06 percent weaker than Monday's 6.1336. "We see big Chinese banks buying dollars in the market which offsets strong corporate demand to sell dollars," said a trader with a Chinese bank in Shanghai.
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