SHANGHAI: The yuan edged up against the dollar on Monday but traded below the Chinese central bank's mid-point as the market is wary that the government may engineer a pause in yuan appreciation amid unstable global economic and market conditions. The People's Bank of China fixed its daily mid-point slightly stronger on Monday after it set the fixing weaker for three straight days late last week after the US Senate approved a controversial bill on Tuesday aimed at forcing Beijing to push the yuan higher against the dollar. Chinese Vice Premier Li Keqiang late on Friday made Beijing's highest level public warning yet against the US Congress bill aimed at the yuan, telling former US Secretary of State Condoleezza Rice that the bill could hinder global recovery. And state media on Saturday quoted Premier Wen Jiabao as telling businessmen that the yuan's exchange rate would remain stable to protect exporters. "It appears China is increasingly worried about the impact of the slowing global economy on its exports," said a trader at a Chinese state-owned bank in Beijing. "Adding to worries is the US politically-motivated yuan bill, so it won't be a surprise if China pauses yuan appreciation which has been seen for the bulk of this year." Spot yuan was trading at 6.3740 at midday, up slightly from Friday's close of 3.3785. It has now risen 3.38 per cent since the start of this year and 7.09 per cent since it was depegged from the dollar in June 2010. Before trading began, the PBOC set the mid-point of the day at 6.3710 compared with Friday's 6.3762. The central bank uses the reference rate to signal the government's intentions for the yuan, which could rise or fall 0.5 per cent from the mid-point in a day. China has mostly let the yuan appreciate steadily this year partly to help in its battle against imported inflation. But more recently since May, global commodity prices have fallen sharply amid a rally in the US dollar.

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