SHANGHAI: China’s yuan held steady in onshore trade on Friday, while its offshore counterpart firmed against a softening dollar as investors cheered a pause in US interest rate hikes.

Another strong central bank setting of the mid-point guidance rate also helped stabilise the yuan. Prior to the market open, the People’s Bank of China set the midpoint rate at 7.1796 per US dollar.

In the spot market, the yuan opened at 7.3160 per dollar and was changing hands at 7.3143 at midday, roughly unchanged from the previous late session close.

The offshore yuan was trading 0.1% stronger from the onshore spot at 7.3218 per dollar.

The dollar was on course for a weekly decline against a basket of currencies as traders wagered that the US Federal Reserve was most likely done with rate increases.

A trader at a Chinese bank said the expectation would continue to pressure the dollar index and help boost the yuan. “However, the yield gap between China and US would not narrow obviously anytime soon, which would limit the yuan’s rebound.”

The market now awaits US jobs data due later in the day for more clues on potential policy direction.

China’s services activity expanded at a slightly faster pace in October, a private-sector survey showed on Friday, with sales growing at the softest rate in 10 months and employment stagnating as business confidence waned.

The China Centre for Economic Research of Peking University expects the onshore yuan will trade between 7.28 and 7.33 in November, citing the economic recovery trend and authorities’ measures to stabilise the exchange rate.

China’s central bank vowed it will maintain the stable operation of the financial markets and prevent the risk of large fluctuations in the yuan exchange rate in a statement on Thursday.