Dollar takes a breather

TOKYO: Major currencies marked time on Wednesday and the Chinese yuan recovered from 11-month lows after authorities took steps on Tuesday to calm financial markets rattled by trade war worries.

Both the yuan and Chinese equity markets have been on edge ahead of July 6, when U.S. tariffs on $34 billion worth of Chinese goods take effect.

Beijing has said it will retaliate with tariffs on U.S. products.

The onshore yuan last traded at 6.6299 against the dollar, up 0.21 percent on the day, after opening at 6.6365. At one point on Tuesday the yuan hit 6.7204 per dollar, its weakest level since early August, before sharply rebounding on reassuring remarks from Yi Gang, Governor of the People´s Bank of China (PBOC).

Governor Yi said in a statement on the PBOC website that the central bank was closely watching foreign exchange fluctuations and would seek to keep the yuan at a stable and reasonable level. Cross-border capital flows were under control, he noted. A Chinese central bank adviser was also quoted as saying authorities did not expect significant yuan depreciation, which also helped the yuan reverse its early losses to move back into positive territory.