Yuan stable: China's yuan maintained stability against the US dollar on Wednesday, supported by the central bank's decision to set the daily midpoint guidance rate at its firmest level in a month.

Investors awaited further policy clarity expected during a press conference later in the day.

The People's Bank of China (PBOC) established the midpoint rate, which guides yuan trading within a 2 per cent band, at 7.1016 per dollar before the market's opening.

The rate marked the firmest since February 2 and was 923 pips stronger than Reuters' estimate of 7.1939.

"The 7.20 level is now seen as a major resistance level anchored by PBOC fixings as authorities aim to maintain stability amidst the annual Two Sessions," noted Alex Loo, macro strategist at TD Securities.

During March, parliamentarians and political advisers convene in Beijing for the Lianghui or "Two Sessions" meetings. 

The yuan has been consistently below the 7.2 level against the dollar for the past month.

Investor focus also remained on an economy-focused press conference scheduled for 3 p.m. in Beijing (0700 GMT), where representatives from the PBOC and other regulators were expected to address media inquiries.

The spot yuan opened at 7.1949 per dollar and traded at 7.1991 at midday, 21 pips weaker than the previous late session close. 

The global dollar index remained stable as traders exercised caution ahead of congressional testimony from Federal Reserve Chair Jerome Powell and US jobs data later in the week.

In offshore trading, the yuan was 128 pips weaker than the onshore spot at 7.2119 per dollar.

(With Reuters Inputs)