In the latest signal of support, the People's Bank of China early on Wednesday offered 267.4 billion yuan ($39.8 billion) of targeted medium-term loans to ensure struggling smaller companies will have continued access to affordable financing.
The injection of funds comes amid expectations that the People's Bank of China (PBOC) has put broader policy easing measures on hold after recent signs of improvement in the world's second-largest economy.
While the prospect of less stimulus has knocked China's stock markets, it has supported the yuan.
"There is some loosening but (policy) is staying within a neutral area, keeping the (U.S.-China) interest rate differential. That is a positive for the renminbi," said Carie Li, economist at OCBC Wing Hang Bank in Hong Kong.
The U.S. Federal Reserve's years-long tightening campaign saw that spread narrow last year, adding to downside pressure on the yuan. But the Fed said this year it is ending these efforts.
Investors are often attracted to higher-yielding currencies. Frances Cheung, head of Macro strategy, Asia, at Westpac in Singapore, said spot yuan is not reacting much to the central bank's short-term liquidity operations.
"Sentiment towards the growth prospect is improving which is supporting the renminbi," she said.
Spot yuan traded at 6.7242 at midday, 36 pips stronger than the previous late session close and 0.06 percent softer than the midpoint. The PBOC set the midpoint rate at 6.7205 per dollar prior to market open, weaker than the previous fix of 6.7082.
The dollar rallied overnight to 22-month high against its peers after strong U.S. housing data further eased concerns of a slowdown in the world's biggest economy. The global dollar index stood at midday at 97.662.
But the dollar only managed to stay above the key level of 97.7 briefly, paring potential pressure on the yuan, said a
Shanghai-based trader, who sees the yuan moving within 6.70 to 6.73 per dollar in coming sessions.
Traders are also awaiting the resumption of face-to-face U.S.-China trade talks in Beijing next week. Negotiators will try to address sticking points over intellectual property and forced technology transfer, the White House said in a statement on Tuesday.
Markets are waiting to hear word of when Chinese President Xi Jinping and U.S. President Donald Trump will meet, which is expected to signal a trade deal has been reached.
The offshore yuan was trading 0.07 percent weaker than the onshore spot at 6.7290 per dollar.
"New catalysts are needed to boost CNH to break below 6.70 persistently," Ken Cheung, Senior Asian FX Strategist at Mizuho.