The Chinese currency strengthened against the US dollar on Tuesday, snapping a 12-session long losing streak. The Chinese central bank set the midpoint at 6.8779, up 206 basis points from Monday. The yuan's rate weakened 1.87 percent against the dollar during the past 10 sessions.

Traders say the dollar's rally is nearing its end, as trading agencies have sold dollars to book profits. Analysts say the greenback doesn't have much room to gain next year due to economic uncertainty. They also say the Chinese central bank will have to let go of its intervention soon, and allow the yuan's rate to settle at more reasonable levels.