SHANGHAI: Disappointing Chinese factory activity data kept a cap on the yuan on Thursday, but the currency looked set for its biggest monthly gain in a year against the weakening dollar.
Spot yuan was changing hands around 7.1250 at midday, little changed from the previous late session close.
If it ends the day at that level, it will have appreciated roughly 2.8% against the dollar in November.
The greenback was rooted near a three-month low on Thursday and was set to post its steepest monthly decline in a year as investors ramped up bets that the Federal Reserve is done with rate hikes ahead of a crucial inflation report later in the day.
Analysts pointed to near-term risks for the yuan as the dollar appears over-sold, but said the prospect of US rate cuts next year and fresh stimulus from Beijing will bolster the Chinese currency in the long term.