shanghai dec 15 reuters  chinas yuan firmed on wednesday after the central bank left a key lending rate unchanged while new data showed factory output grew faster than expected but traders and analysts expect further gains in the currency to be limited traders said that moves would also be muted as global markets await the us federal reserve policy meeting outcome theres not likely to be much going on today the yuan cant move the market is expecting a quicker taper from the fed which will push the dollar index up but the yuan is still the same said a trader at a foreign bank before the market open the pboc set the yuans daily midpoint at 63716 per dollar its weakest in just over a week spot yuan opened at 63660 per dollar and firmed to 63644 by midday 26 pips stronger than tuesdays late session close the offshore yuan strengthened to 63705 per dollar from a close of 63736 the chinese unit even set a new milestone against a tradeweighted basket of currencies cfscnyi rising to its strongest level since november 2015 a slight firming in spot yuan came after the peoples bank of china pboc on wednesday injected 500 billion yuan into the financial system through its mediumterm lending facility mlf partly rolling over maturing loans but leaving the interest rate unchanged read more the mlf injection came alongside the implementation of a previously announced cut to banks reserve requirement ratio rrr which freed up 12 trillion yuan worth of longterm funds the rrr cut reflects a gradual shift by policymakers in beijing spurred on by worries over weakening economic growth toward policy easing new data on wednesday further illustrated the mixed economic picture as factory output grew faster than expected in november while retailers suffered from new curbs to fight rising covid19 cases and investment growth slowed read more but ken cheung chief asian fx strategist at mizuho bank said the decision not to lower the mlf rate which went against some market expectations of a cut to the benchmark loan prime rate this month suggested that easing signals had receded there does not exist a clear relationship between rrr cut and rate cut he said noting the lack of an mlf rate cut had pushed up yuan forward points as investors reconsidered expectations of policy divergence between the us and china 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 official midpoint rate it sets each morning figure reflects difference from pbocs official midpoint since nondeliverable forwards are settled against the midpoint  reporting by andrew galbraith and jindong zhang editing by sam holmes