SHANGHAI: China's yuan rebounded against the U.S. dollar on Wednesday, recovering all of its losses in the previous session, as companies took profits after its dip earlier this week.
Sentiment was also supported by a relief bounce in offshore yuan overnight, after a top White House adviser denied a report that a preliminary trade meeting between U.S. and Chinese officials had been canceled.
Global financial markets skidded on Tuesday after The Financial Times reported the Trump administration had rejected an offer from China for preparatory talks ahead of high-level trade negotiations next week.
Prior to the market opening on Wednesday, the People's Bank of China set the midpoint rate lower for the fourth straight session at 6.7969 per dollar, 115 pips or 0.17 percent weaker than the previous fix of 6.7854.
In the spot market, the yuan opened at 6.8058 per dollar and was changing hands at 6.7867 at midday, 209 pips firmer than the previous late session close and 0.15 percent stronger than the midpoint.
Losses in the yuan earlier this week were sparked by oil companies' dollar demand, and by dollar strength overseas, one trader at a Chinese bank said.
A second trader at a bank in Shanghai said many corporate clients started to sell dollars when the yuan fell below the psychological support level of 6.8 per dollar on Tuesday.
The offshore yuan was trading at 6.7928 per dollar at midday.
An agreement by U.S. and Chinese leaders last month to resume trade talks has offered some respite for battered global assets, including the yuan. But White House officials have given mixed signals over how much progress has been made so far as an early March deadline rapidly approaches.
Washington has threatened to sharply hike tariffs on Chinese imports unless Beijing makes key concessions.
The global dollar index rose to 96.334 at midday from the previous close of 96.303.
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