China’s yuan edged up against the dollar on Wednesday after the central bank set a firmer midpoint and state media warned billionaire investor George Soros against betting on falls in the Chinese currency and Hong Kong dollar.

The People’s Bank of China set the midpoint rate at 6.5533 per dollar prior to market open, 0.02 per cent firmer than the previous fix 6.5548.

The spot market opened at 6.5780 per dollar and was changing hands at 6.5797 at midday, 0.03 per cent stronger than the previous close.

“Foreign currency demand appeared to be mild so the market remained stable,’’ said a trader at a Chinese commercial bank in Shanghai.

Dollar buying

Traders reported that there was a bout of dollar buying in late trade on Tuesday as some investors took defensive tactics against the yuan’s further depreciation.

They said that investors tended to buy dollar in late trade as fewer state-owned banks, who typically trade on behalf of the central bank, bought the yuan to boost its value during that time.

Betting on falls

On Tuesday, China’s state media warned George Soros against betting on falls in the value of the Chinese currency and Hong Kong dollar amid widespread worries over the health of the world’s second-largest economy.

A handful of mainly US-based macro hedge funds have led bets against China’s yuan since late last year and they have predicted a devaluation of the yuan between 20 and 50 per cent in the long run.

On Wednesday, the offshore yuan was trading 0.50 per cent weaker than the onshore spot at 6.6129 per dollar.

The onshore yuan weakened 0.2 per cent against the euro to 7.1498. It firmed 0.1 per cent against the Japanese yen, hovering at 5.5697 to 100 yen.

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