The Chinese yuan was once again rescued by the People’s Bank of China (PBOC) after Reuters reported, citing sources, major Chinese state-owned banks sold US dollars in both onshore and offshore markets in late trade on Tuesday.

One of the sources said that “the selling of dollars by state banks in early US trading hours lifted the yuan.”

The other source also spotted such state banks' dollar selling in the onshore market late in the Asian day.

“It was unusual for the domestic branches of China's big banks to be active in onshore trades during London or New York trading hours,” the sources said.

Market reaction

In an immediate reaction to the above headlines, USD/CNY came under renewed selling pressure and surrendered the 7.30 level. The pair is trading at 7.2903, down 0.21% on the day, as of writing. The yuan has been hitting successive record lows in recent days, reflecting a strengthening dollar and worries over a slowing Chinese economy.