- The onshore yuan finished domestic trading 0.19pc stronger at 7.0960 per US dollar, after flatlining earlier in the session.
- The offshore yuan rose as much as 0.3pc to 7.1236 per dollar.
- The dollar index fell as much as 0.57pc to 100.44 on Thursday.
HONG KONG: The yuan climbed on Thursday afternoon as traders unwound short positions on the Chinese currency after the greenback fell on heightened fears over the impact of the coronavirus on the US economy.
The onshore yuan finished domestic trading 0.19pc stronger at 7.0960 per US dollar, after flatlining earlier in the session.
The offshore yuan rose as much as 0.3pc to 7.1236 per dollar.
Limiting gains in the Chinese currency was a Financial Times report that said the People's Bank of China was considering a cut to the deposit rate.
A softer greenback helped the yuan, as investors braced for a likely jump in US claims for unemployment benefits as companies lay off workers due to the epidemic.
The dollar index fell as much as 0.57pc to 100.44 on Thursday.
Two traders said they closed short positions in the yuan as the dollar slumped in the afternoon and booked profits.
The yuan has been relatively stable in the recent global market rout, said Steven Dooley, an APAC currency strategist at Western Union Business Solutions.
"It (the yuan) does have the advantage of higher interest rates, infections rates being contained and the belief that China will be able to help its economy bounce back quicker than others," Dooley said.
Mainland China reported a second consecutive day of no new local coronavirus cases as the country's epicentre Hubei province opened its borders, although imported cases rose.
Separately, the People's Bank of China set the midpoint rate at 7.0692 per dollar prior to market open, firmer than the Reuters estimate of 7.0839 per dollar.
"The stronger midpoint (indicates) that as recent dollar purchases increased, the central bank does not want to see USDCNY surge higher too quickly," said another trader, who works for a foreign bank.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.33 at 0846 GMT, slightly weaker than the previous day's 94.68.