China’s yuan weakened slightly against the dollar in early Monday trade even though the central bank increased the midpoint setting by the most for one day since the landmark revaluation of the currency in 2005.

Traders said the yuan weakened as banks and clients sold the currency after it made a hefty gain on Friday.

The People’s Bank of China set the midpoint rate at 6.3154 per dollar prior to market open, firmer than the previous fix of 6.3495, and firmer than the previous day’s closing quote of 6.3175.

The spot market opened at 6.3200 per dollar and was changing hands at 6.3269 in early trade, 94 pips weaker from the previous close and 0.18 per cent weaker than the midpoint.

The spot rate is currently allowed to trade with a range 2 per cent above or below the official fixing on any given day.

The offshore yuan was trading -0.17 per cent weaker from the onshore spot at 6.3378 per dollar.

The yuan made its biggest one-day gain against the dollar in more than 10 years in onshore markets on Friday, as traders speculated that state-owned banks had intervened on behalf of the central bank to raise the currency’s value.

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