Reuters reported late on Wednesday the US government was considering Huawei-like sanctions on Chinese video surveillance firm Hikvision over China's treatment of its Uighur Muslim minority, complicating the protracted trade war between the world's two largest economies.

Washington placed Chinese telecoms giant Huawei Technologies on a trade blacklist last week, and is reportedly pressing South Korea to drop using Huawei's equipment, citing security concerns.

Spot yuan fell to 6.9190 per dollar by 4.30 pm local time, registering its weakest onshore close since November 30, 2018.

But it quickly pared some of those losses after PBOC Deputy Governor Liu Guoqiang said in published remarks that China has ample reserves, policy tools and confidence to keep the yuan exchange rate stable.

The PBOC's stronger-than-expected midpoint also kept the yuan's fall in check, traders said. Spot yuan can trade 2 percent either side of the fixing.

The PBOC set the midpoint rate at 6.8994 per dollar prior to market open, a touch weaker than the previous fix of 6.8992, but still stronger than the Reuters' estimate of 6.901 per dollar and traders' expectations.

"(PBOC) has been keeping (USDCNY fixing) artificially low, to persuade people from trying (to short the yuan)," said a Hong Kong-based head of forex trading at an international bank.

Central bank jawboning has helped stem downward pressure on the yuan, said a second trader, based in Shanghai.

"The renminbi has been relatively stable recently because officials have been outspoken," he said.

The verbal campaign started earlier this week, when Pan Gongsheng, another PBOC deputy governor, said China will keep the yuan exchange rate within a reasonable and balanced range, after Reuters reported that the central bank is keen to keep the currency from hitting the widely watched 7 per dollar handle.

The scheduled meeeting between US President Donald Trump and Chinese President Xi Jinping at the G20 in Japan in late-June is also capping downward pressure on the yuan, leaving it in a tight range, said Carie Li, an economist at OCBC Wing Hang.

"People still have hopes for the G20 meeting.

You can't rule out, at this point, that the two sides will not agree to something there," she said.

The next round of US tariffs on Chinese goods could come around the time of the meeting, according to remarks by US Treasury Secretary Steven Mnuchin on Wednesday.

As of 0857 GMT, the offshore yuan was trading 0.32 percent away than the onshore spot at 6.9384 per dollar.

The global dollar index rose to 98.182 from the previous close of 98.041.