Recent actions by China's central bank have cemented a new reality for traders: one where bets for yuan depreciation go head-to-head with government stabilization efforts in a new "managed float" regime.
On Friday the People's Bank of China (PBoC) snapped a three-day streak of weaker yuan fixings, setting the currency at 6.3975 per dollar versus the previous close of 6.3990, after officials effectively quashed expectations for continued currency falls at a press conference on Thursday.
Friday's stronger fix was the latest sign of just how serious PBoC officials are about preventing extended depreciation, traders said. Late on Thursday, Reuters reported that the PBoC asked state banks to buy more yuan on its behalf for a second straight day.
This may mean the spell of aggressively weaker fixings is over, for now, at least.
"Authorities signaled on Thursday that they are comfortable with the yuan's approximate 3 percent depreciation this week, and now that the spot rate has converged to the fix for the first time since November, we can expect a period of more stability in fixes," Khoon Goh, ANZ's senior FX strategist, told CNBC.
So now that the central bank is happy with the yuan's position, does this mean the end of intervention? Not quite.