BEIJING/SHANGHAI: The yuan fell slightly versus the dollar by midday on Wednesday after the People's Bank of China set a weaker mid-point, as the dollar is expected to rebound in the short term after the United States averted a debt default. Dealers said the only 22-pip fall in the mid-point may reflect the central bank's intention of keeping the yuan on an upward trajectory in the long term, despite some sporadic adjustments in the pace, following the expected rebound in dollar. "The trend of yuan appreciation will not be disturbed in the future, as there are no signs pointing to a slowdown in consumer inflation," said a trader at a medium-sized bank in Shenzhen. Spot yuan was trading at 6.4404, weaker than Tuesday's close of 6.4382. It has now appreciated 6.0 per cent since it was depegged from the dollar in June 2010 and 2.32 per cent so far this year. Before trade began the PBOC fixed the yuan's mid-point at 6.4441 against the dollar, weaker than Tuesday's 6.4419. Traders said the dollar may continue to weaken in the long term, as the US debt problem has not been solved completely. While Congress buried the specter of a US debt default by passing a deficit-cutting package, concerns lingered of a possible downgrade of the top-notch American credit rating. A Chinese ratings agency on Wednesday downgraded the US credit rating from A-plus to A, saying the deal to lift the debt ceiling won't solve underlying US debt problems or improve its debt-paying ability over the long run. "In the long run, the dollar may continue to drop, which could push the yuan further up for the rest of the year," he added.

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