SHANGHAI: China’s yuan hovered near a three-week high against the dollar on Monday, underpinned by broad greenback weakness following Federal Reserve Chair Jerome Powell’s dovish pivot suggesting an imminent rate cut in the world’s largest economy.

Fed Chair Powell on Friday endorsed an imminent start to interest rate cuts, saying further cooling in the job market would be unwelcome and expressing confidence that inflation is within reach of the US central bank’s 2% target.

By 0305 GMT, the onshore yuan traded at 7.1218 per dollar, after edging up to hit a three-week high of 7.1135 in early trades.

The yuan is up 1.4% against the dollar this month, recouping nearly all its losses in the first half of the year. Having spent all year trying to put a floor under the tumbling yuan, market watchers said China’s central bank is suddenly faced with the opposite problem and is turning to subtle ways to stop the currency from appreciating sharply.