shanghai nov 22 reuters  chinas yuan firmed on monday underpinned by corporate demand while signs suggesting policymakers have grown increasingly uncomfortable with the currencys recent rally prompted some investors to trim their bullish bets demand from companies to convert their foreign exchange into yuan largely offset a rising dollar a weakerthanexpected official yuan midpoint rate and a proposal asking banks to cap the size of their proprietary trading accounts traders said chinese companies traditionally have higher yuan demand for various payments in the last two months of the year which could continue to lend support prior to market opening the peoples bank of china pboc set the midpoint rate at 63952 per dollar 127 pips or 02 weaker than the previous fix of 63825 the fixing was also weaker than market projections and it was 72 pips softer than reuters estimate of 63880 per dollar going forward chinas central bank will continue setting usdcny with an upward bias if needed to curb speculation in our view gao qi fx strategist at scotiabank said in a note in the spot market the onshore yuan opened at 63908 per dollar and was changing hands at 63841 at midday 25 pips firmer than the previous late session close on friday sources told reuters on friday the foreign exchange market selfdiscipline mechanism has proposed that commercial banks cap the volume of their proprietary trading accounts with many market participants interpreting it as a move to limit financial institutions speculation on the yuan read more the potential for greater divergence in monetary policies between china versus other major economies in 2022 could bring about volatility for the yuan and the authorities are clearly concerned about further amplification by fx speculators analysts at maybank said in a note but they added that factors including hopes for possible uschina tariff reductions chinas growing trade surplus and ample dollar liquidity onshore could continue to support the yuan they expect the chinese currency to stay in a range of 637 to 64080 per dollar in global markets the safehaven us dollar hovered at a near 16month high on growing anxiety over the impact of surging covid19 infections in europe and a faster pace of stimulus tapering in the united states by midday the broad dollar index rose to 96147 from the previous close of 96138 while the offshore yuan was trading at 63857 per dollar divergence of the dollaryuan exchange rate negative number indicates that spot yuan is trading stronger than the midpoint the peoples bank of china pboc allows the exchange rate to rise or fall 2 from the official midpoint rate it sets each morning figure reflects difference from pbocs official midpoint since nondeliverable forwards are settled against the midpoint  reporting by winni zhou and andrew galbraith editing by jacqueline wong