"A weaker currency would, at most, be a shield, safeguarding wider damage from a trade war and the hurdles faced by Chinese companies' operating in the USA", it said.
Deutsche Bank strategist Perry Kojodjojo said he does not believe China would "weaponize" its currency as part of retaliation against the USA, given the potential costs.
In equities, the blue chip CSI300 Index slumped by more than 2 per cent in the morning trading session, and the Shanghai Composite Index was down more than 1 per cent before staging an afternoon comeback.
Both the yuan and Chinese equity markets have been on edge ahead of July 6, when US tariffs on $34 billion worth of Chinese goods take effect.
Valuations remain supportive of the dollar, with its trade-weighted basket still below long-term averages and the market pricing in two more interest rate hikes for 2018.
China's central bank chief on Tuesday blamed the yuan's recent weakness on the USA dollar's strength and external uncertainties, as state-owend banks were seen trying to prop up the currency.
The currency hit to an eleventh month low today after it fell almost 1% against the USA dollar in early trading, and recovered to gain 0.3%.
Previous big plunges in the yuan in recent years have wreaked havoc in Chinese and global stock markets.
James Woods says his agent dropped him on Independence Day
In the excerpted email from Wednesday, Kaplan said he was "feeling patriotic" and no longer wanted to represented Woods. The actor went on to thank Kaplan for "all [his] hard work and devotion" on his behalf.
Tech: Most of Earth's meteorites came from five or six ancient planets
Meanwhile, meteorites are rocks that land on the Earth's surface, most of which are fragments of asteroids that broke up long ago. That's a pretty accurate description, but that doesn't mean that asteroids don't get to have families.
Out of this world, a planet is born
The planet is called PDS 70b and scientists have determined it is a gas giant with mass several times that of Jupiter . Thomas Henning, director at the Max Planck Institute for Astronomy and leader of the teams, said in a statement .
The yuan fell to 6.7204 per dollar, its weakest since August 7, 2017 and the first time it dropped below 6.7 since August 9, 2017, before crossing back and forth over the line.
"Intensifying trade frictions between China and the United States are a test that the Chinese economy inevitably had to experience during its rise", the Economic Daily said.
World stocks rose on Tuesday, supported by gains in Europe and three straight days of tech-driven rises in the United States, even though markets across Asia and especially China remained in the grip of trade turbulence.
Elsewhere in currency markets, the euro, which had been pressured by political uncertainty in Germany, pared losses after Chancellor Angela Merkel's conservatives settled a row over migration that threatened to topple her governing coalition after interior minister Horst Seehofer dropped his threat to quit.
RBA Governor Philip Lowe said "one uncertainty regarding the global outlook stems from the direction of worldwide trade policy in the United States", cautioning that the recent U.S.
China is Australia's major export market and its currency, the Australia dollar, is considered a liquid proxy for China-related risk.
Other Asian currencies weakened, especially those such as the Indonesian rupiah that are doubly exposed - to trade and oil prices approaching $80 a barrel. Shanghai's bourse hit a 2-year trough .SSEC though both indexes inched higher towards the close as the yuan recovered.
The People's Bank of China has tolerated the depreciation beyond its own stated exchange-rate policy.