Chinese state-owned banks are propping up the yuan while the central bank signals currency weakness

• Chinese state-owned banks have been buying up the yuan and selling the dollar, Reuters reported.
• That comes as China's central bank lowers the dollar-yuan daily fixing rate to a three and half month low.
• But the yuan has gained 2% in the past week in a recent rally, its highest level in nearly four months.

Big banks in China are buying up yuan and selling the dollar in an effort to prop up the Chinese currency.

This week, major state-owned banks have been helping boost the yuan by swapping it for dollars in the onshore market and selling those dollars in the spot currency market, Reuters reported on Tuesday.

The move also comes as The People's Bank of China has lowered the dollar-yuan daily fixing rate to a three and a half month low of 7.1406 per dollar as of Tuesday.