China's yuan closed sharply higher on Thursday, rebounding from an eight-week low touched a day earlier, as the suspected aggressive dollar by the central bank died down, leaving corporates scrambling for other sources of yuan. Spot yuan closed at 6.2329 versus the dollar, a gain of 0.3 percent over Wednesday's close of 6.2518. The yuan had touched an eight-week intraday low of 6.2588 on Wednesday afternoon.

The People's Bank of China (PBOC) signalled its desire for stability by setting its daily midpoint nearly flat at 6.2887 compared with Wednesday's fix of 6.2883. The PBOC allows the yuan to rise or fall by no more than 1 percent from the midpoint it sets each morning. Traders say the Federal Reserve's surprise announcement of a new round of quantitative easing had little impact on the market on Thursday, but they say the yuan could strengthen in line with other non-dollar currencies as the Fed's bond buying runs its course.

Copyright Reuters, 2012