SHANGHAI: The yuan edged lower versus the dollar on Thursday, shrugging off a slightly stronger mid-point by the People's Bank of China amid recently weakened expectations of yuan appreciation. Traders said the market did not take Thursday's PBOC mid-point as a signal for an immediate return of yuan appreciation because of wrangling between China and the United States over the value of the yuan on the political front. The PBOC has set a slew of weaker mid-points since Oct. 12, right after the US Senate approved a bill aimed at pressing China to let the yuan appreciate faster, saying an artificially weak yuan was robbing jobs in the United States. Weaker mid-point fixings have guided the yuan down more than 400 pips against the dollar compared with the currency's peak at 6.3375 hit on Oct. 11, right ahead of the US Senate's bill approval. China has said the yuan's exchange rate is not at the core of the China-US trade imbalance and it has never purposefully sought trade surpluses with the United States. "China must choose one way or another to express its displeasure with the United States, and it appears to have chosen to let the yuan pause appreciation seen for the most part of this year," said a dealer at a European bank in Shanghai. "Once a tactic has changed, it won't be changed back too soon, so few take a rise in the yuan's mid-point today seriously." Spot yuan was trading at 6.3792 versus the dollar at midday, down from Wednesday's close of 6.3775. It has still risen 3.3 per cent since the start of this year and 7.01 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 6.3652, stronger than Wednesday's 6.3727. The central bank uses the reference rate to signal the government's intentions for the yuan, which can rise or fall 0.5 per cent from the mid-point in a day.

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