HONG KONG • China’s yuan fixing is back in focus, with a run of surprises moving the market in recent days.

The central bank set its reference rate — which limits onshore moves to 2% on either side — at a weaker than expected level for the third day in a row yesterday. The rates, and the removal of a reserve requirement rule on the trading of foreign-exchange forwards, are fuelling bets that authorities want to limit gains after the onshore yuan surged more than 4% against the dollar in the three months through Sept 7.

The People’s Bank of China (PBoC) set yesterday’s fixing at 6.5382 per dollar, compared to the average forecast of 6.5355 in a Bloomberg survey of 19 traders and analysts. The authorities have had greater opportunity to sway the fixing either way since May, with the introduction of a “countercyclical factor” to the rate-setting mechanism.

“The PBoC still wants a relatively stable yuan,” said Nathan Chow, a Hong Kong-based economist at DBS Group Holdings Ltd. “Even if it strengthens or weakens, the pace needs to be controlled, and in an orderly and gradual manner. This will be easier for exporters to manage risks. The market expectation is that there should be no big changes or surprises before the party congress next month.”

The yuan’s rally began to falter last Friday as the removal of the reserve rule made it less expensive to bet on yuan declines. The monetary authority weakened Tuesday’s fixing by the most in eight months following an overnight surge in a gauge of the greenback, pushing the onshore spot rate lower.

The onshore yuan plunged 0.7% against the dollar in the last two days, the most in Asia after Japan’s yen. The currency rose 0.1% to 6.5298 per dollar as of 4:48pm in Shanghai yesterday, while the offshore rate strengthened 0.1% to 6.5289 in Hong Kong. The Bloomberg Dollar Spot Index fell 0.2%. — Bloomberg