Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.7592 per dollar, 23 pips firmer than the previous fix of 6.7615.

In the spot market, onshore yuan opened at 6.7496 per dollar and was changing hands at 6.7645 at midday, 65 pips weaker than the previous late session close and 0.08 percent softer than the midpoint.

Traders said sentiment was stable, while recent heavy corporate dollar selling for yuan had eased.

"Corporate client's dollar selling has almost come to an end as many firms, especially in the manufacturing sector, will shut down for the upcoming Lunar New Year from next week," said a trader at a Chinese bank in Shanghai.

The yuan's gains had been supported by seasonal corporate dollar selling as many companies usually have higher demand for the renminbi for various payments and financing needs ahead of the new year holiday and choose to offload their dollars.

On Wednesday, the central bank injected a record $83 billion into the financial system, seeking to avoid a cash crunch that would put further pressure on the weakening economy. The week-long break starts in early February.

A second trader at a Chinese bank in Shanghai said spot yuan was consolidating after its recent sharp rally and expects the currency to track the dollar's movement in the near term.

In global markets, the dollar traded marginally higher against a basket of its peers, taking a breather after gaining about 1 percent in the past five sessions. [FRX/]

The global dollar index <.DXY> rose to 96.129 at midday from the previous close of 96.059.

Many market participants see the yuan fluctuating in a range of 6.7 to 6.8 per dollar for now as the authorities pledge to keep the currency stable while shifting to an easier stance to arrest a slowdown in the broader economy.

The PBOC injected a net 380 billion yuan through open market operations on Thursday following its biggest-ever single day net liquidity injection a day earlier. [CN/MMT]

China is expected to release fourth-quarter GDP data on Monday. Some economists expect growth for the quarter may ease to its slowest since the 2008/2009 global financial crisis.

As of midday, offshore yuan was trading at 6.7706 per dollar.

(Reporting by Winni Zhou and John Ruwtich; Editing by Jacqueline Wong)