China's yuan edged higher on Wednesday after a private survey showed activity in China's services sector grew modestly in February, though the underlying currency trend remained weak. New orders rose at their quickest pace in three months, the HSBC/Markit Services Purchasing Managers' Index (PMI) showed. The survey was one of the few bright spots as China struggles to tackle deflationary pressures affecting the economy. Late on Saturday, the People's Bank of China cut interest rates, its third major easing since late November.
On Wednesday, the People's Bank of China set the midpoint rate at 6.1525 per dollar, slightly firmer than the previous fix of 6.1543. Spot yuan opened at 6.2714 per dollar and was changing hands at 6.2707 at midday, 36 pips stronger than the previous close and 1.92 percent away from the midpoint. The spot rate is currently allowed to trade 2 percent above or below the official fixing on any given day. The offshore yuan was trading marginally weaker than the onshore spot at 6.2785 per dollar.