China's yuan firmed against the US dollar on Friday as the greenback pared gains made following the Federal Reserve's hawkish policy statement and as investors took the latest Chinese sovereign rating downgrade in their stride. However, the Chinese currency remains on course for its second weekly loss. It has lost more than 1,500 pips from a 21-month peak hit on August 8 as a rallying yuan forced authorities to put a brake on its rise and relax some restrictions on capital outflows.
Prior to market opening on Friday, the People's Bank of China raised its official midpoint for the first time in four days to 6.5861, only 6 pips firmer than the previous fix of 6.5867 on Thursday.
Traders said the official guidance matched market expectations. The spot yuan opened at 6.5718 per dollar and was changing hands at 6.5901 at midday, 21 pips firmer than the previous late session close but 0.06 percent softer than the midpoint.
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