SHANGHAI: China’s yuan rebounded to a near three-week high against the dollar on Wednesday, after breaching a key downside threshold a day earlier, with gains in the nation’s blue-chip stock index further helping to underpin sentiment.

Traders said the minutes of the Federal Reserve’s last meeting will be watched carefully for more clues on the US monetary outlook, which has buffeted global markets in recent months.

Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1030 per dollar, 38 pips firmer than the previous fix of 7.1068.

The central bank continued its months-long practice of setting the official guidance at levels firmer than market projections, widely viewed by traders as an attempt to keep the currency stable.

Wednesday’s midpoint was 847 pips firmer than a Reuters estimate of 7.1877. In the spot market, the onshore yuan opened at 7.1937 per dollar and strengthened to a high of 7.1811 at one point, the strongest level since Feb. 2. It was changing hands at 7.1816 by midday, 109 pips firmer than the previous late session close.