China's yuan was steady against the dollar on Thursday, reflecting a largely unchanged midpoint set by the central bank, traders said. The People's Bank of China (PBOC) set the midpoint rate at 6.1173 per dollar prior to market open, down 0.03 percent from the previous fix at 6.1152. The spot market opened at 6.2095 per dollar and was changing hands at 6.2094 at midday, almost unchanged from 6.2092 at the previous close.
Traders said the marginally weaker midpoint reflected overnight firmness in the US dollar, though the yuan held steady partly as Beijing has signalled its intention to keep the currency stable for now. State-owned banks, which usually act on behalf of the central bank, sell dollars to balance supply and demand. "If we break the 6.21 level today, big state-owned banks will come to sell dollars to balance it out tomorrow, so why do it?" said a trader at a Chinese city commercial bank in Shanghai. The dollar rose on Wednesday after Federal Reserve Chair Janet Yellen reinforced market expectations for a US interest rate hike, possibly as soon as September. The offshore yuan was at 6.2140, trading 0.07 percent weaker than the onshore spot.