People’s Bank of China signals renewed action to support the yuan’s value amid trade war

China’s central bank signalled that it’s taking action to support the yuan as trade tensions with the US show no signs of ending soon.

Starting this month, banks resumed using an adjustment, known as the counter-cyclical factor, in the daily pricing of the currency against the dollar to counter the bias toward a weaker yuan, the People’s Bank of China said late Friday.

China had suspended use of the factor in January, a move interpreted to mean that policymakers had grown more comfortable with the yuan’s trajectory after several months of gains against the dollar.

The PBOC said Friday that the factor “plays a positive role in keeping the yuan rate at a reasonable equilibrium level.” The onshore yuan strengthened in late trading to cap the first weekly gain since early June.

Pessimism about the yuan’s value against the US dollar lingers, as a trade war between the world’s two biggest economies is primed to escalate after officials failed to make progress in two days of negotiations in Washington.