On Thursday, the People’s Bank of China set the yuan’s reference rate weaker at 6.6273 against the US dollar, down 217 basis points or 0.3 per cent from Wednesday’s rate. This is the first time this week for the central bank to weaken the yuan’s fixing. The yuan pulled back on Wednesday after hitting an eight-week closing high in the prior session.

The onshore yuan has strengthened more than 0.4 per cent in the past two weeks.

For other currencies, the Japanese yen surged 0.48 per cent to 99.76 against the greenback, extending its winning streak to a fifth straight session.

The British pound strengthened 0.28 per cent to trade at US$1.3076. The euro also rose 0.26 per cent to US$1.1315, rising for a fifth consecutive day.

Overnight, the minutes from the Fed’s July meeting showed that officials were divided in the urgency to raise the rate, as the inflation did not pick up quickly while the labour market showed progress.

“The minutes support our view that the Fed still wants to squeeze in a rate hike before the end of the year, but is in no hurry....The November meeting takes place a week before the elections, which would make the first hike since December 2015 unlikely. That leaves the December meeting as the most feasible option for a rate hike,” according to a Thursday note by Rabobank Financial Markets Research.

Analysts expect the Chinese yuan to remain stable ahead of G20 Summit in early September.

“The Chinese authorities are likely to maintain broad yuan stability, both against the dollar and on a trade-weighted basis, ahead of key events such as the G20 Summit in Hangzhou in early September and the inclusion of yuan into the IMF’s Special Drawing Rights in October. We saw a glimpse of such window dressing during the G20 finance ministers and central bank governors meeting in Chengdu in July,” Hui Tai and Ian Hui from JP Morgan Asset Management said in a recent research note.