China’s yuan strengthens after three day fall

China on Friday raised the reference rate for its yuan currency against the U.S. dollar by 0.05 percent, after allowing the yuan to nosedive which triggered concerns of a currency war.

Global markets may have convulsed since China pushed its currency lower this week, but the step is “completely meaningless”, given its relatively small move, perma-bear Marc Faber, publisher of The Gloom, Boom & Doom Report, said.

It also drew accusations from U.S. politicians that Beijing was unfairly supporting its exporters.

China’s short-term funding costs climbed slightly this week as Tuesday’s unexpected devaluation of the yuan tightened liquidity in the money market, traders said. “The PBOC will keep the yuan stable at a reasonable, equilibrium level it said in a statement delivered ahead of a rare press briefing Thursday”.

ANALYST VIEW: The Chinese central bank’s “opaque communications policy may well have led to panic over-selling earlier in the week”, market analyst Angus Nicholson of IG said in a commentary.

3982 to the dollar on Thursday, down from the previous day’s close of 6.

There are now around 4 million households in China that have private wealth of at least $1 million according to Boston Group Consulting, and private bankers say last month’s stock market turmoil had already prompted them to make more investments overseas.

The Australian dollar firmed to 73.59 US cents from 72.62 cents on Tuesday, while the Chinese yuan fetched 19.39 yen against 19.47 yen.

The dollar eased against most Asia-Pacific currencies, sliding to Sg$1.3971 from Sg$1.4135 on Wednesday, to Tw$32.20 from Tw$32.50, to 13,766 Indonesian rupiah from to 13,825 rupiah, and to 35.18 Thai baht from 35.55 baht.

China’s move has sent shock waves through Asian markets but the China central bank sought to calm fears, saying it was not the start of a sustained depreciation. After setting the guiding rate for the currency lower for a third day, the central bank reportedly ordered state-run banks to buy the currency at designated rates.

Data on Chinese factory activity growth and retail sales on Wednesday underlined sluggish growth in the world’s second-largest economy, while fiscal expenditures jumped 24.1 percent in July, reflecting Beijing’s efforts to stimulate economic activity.

The onshore Chinese yuan seems to be stabilizing at 6.40 per dollar today after the People’s Bank of China left its fix rate little changed this morning.

The intervention is “a hopeful sign that the authorities are not shooting for a maxi-devaluation, which we expect will result in market pressure on the spot rate gradually becoming more two-way”, Tim Condon, head of Asian research at ING Groep NV in Singapore, wrote in a note.