The yuan has been on a downward trend for months, weakening around 9% since the start of April, according to data from the central bank.
On Sunday, Beijing went one step further: The People's Bank of China, the central bank, pulled a financial lever that will effectively pump $174 billion into the economy. "As the possibility increases that trade frictions could escalate into political and military confrontation, global investors are more likely to avoid the risks (of Chinese shares)", Guangzhou-based Wanlong Securities Consultation Co said in a research note.
Higher yields on U.S. Treasuries are likely to put more pressure on the yuan as China continues to make use of targeted policy easing to energize the domestic economy.
Beijing imposed similar controls in October 2015 after a change in the exchange rate mechanism prompted markets to bet the yuan would fall.
Coming on the final day of the National Day holiday, the South China Morning Post says "the central bank's announcement may also serve as a shot in the arm for the China's stock market when trading resumes on Monday morning".
China's yuan eased against the U.S. dollar in thin trade on Wednesday, reflecting a weaker official midpoint, as the market waited to see what the U.S. Federal Reserve does at a policy meeting and how its Chinese counterpart reacts.
It also raised the stakes for US inflation figures due later on Thursday as a high outcome would only stoke speculation of more aggressive rate hikes from the Federal Reserve.
"China is moving towards a more mature economic model from the one that has driven its remarkable growth in the last 20 years and experiencing growing pains in the process", she added.
"We've been expecting for some time now the USA market to start delivering volatility".
Oil prices skidded in line with U.S. equity markets, even though energy traders anxious about shrinking Iranian supply from U.S. sanctions and kept an eye on Hurricane Michael, which closed some U.S. Gulf of Mexico oil output.
Tourism spending by domestic travellers in the first four days of the National Day holiday, which ended on Sunday, rose just 8.1% from past year, which is much less than the 21% growth recorded in 2017, according to figures from the China Tourism Academy.
That left the dollar at 95.4397 against a basket of currencies. Before trading began on Monday, the PBOC set the midpoint of the yuan's daily trading band at 6.8957 per dollar, its weakest level since May 11, 2017. Co, Kweichow Moutai Co and Hangzhou Hikvision Digital Technology Co - old favourites that jumped at least 97 per cent a year ago - were the most sold by overseas traders on Monday.
The dollar was already losing ground to both the yen and the euro, as investors favored currencies of countries that boasted large current account surpluses.