Cryptocurrencies were volatile after suffering one of their biggest losses on Wednesday in the wake of China's decision to ban financial and payment institutions from providing digital currency services.
Elsewhere, the Australian and New Zealand dollars eased slightly as the Antipodeans struggled to break through heavy technical resistance, but sentiment remains positive due to rising commodity prices, some traders said.
Analysts and traders also say that relatively tight cash conditions ahead of monthly tax payments due this week continue to provide some support for China's currency.
The auction in Hong Kong is aimed at improving the yuan yield curve in the financial hub, the People's Bank of China (PBOC) said in a statement on its website.
The volume-weighted average rate of the benchmark overnight repo traded in the interbank market, rose to 2.13% in morning trade, the highest level since April 30.
George Tharenou, an economist at UBS, estimated the budget contained A$96 billion in extra stimulus over five years, leading to upward pressure on wages and inflation.
The yuan's weakness came after the global dollar index on Monday touched its weakest level since late February. It was little changed on Tuesday at 90.253.
The Canadian dollar was trading 0.1% higher at 1.2272 to the greenback, or 81.49 US cents, having traded in a range of 1.2266 to 1.2317. On Friday, it touched its strongest intraday level since February 2018 at 1.2262.
"The rapidly improving economic outlook in the UK amid general dollar weakness may just be the catalyst to move sterling back above 1.40 in the coming weeks," said Commonwealth Bank of Australia analyst Kim Mundy.