New Delhi, Nov. 12 -- The Chinese yuan is expected to strengthen against the US dollar in the near term, with the USD/CNY exchange rate likely to trade in the range of 6.65-6.70, although elevated US bond yields, renewed trade restrictions and weakening domestic confidence could pose risks to its appreciation, according to a report by ICICI Bank.

The lender noted in its report, China's widening trade surplus is supporting foreign currency inflows and providing stability to the yuan against the US dollar. "However, currency appreciation could be limited by weak domestic demand," it said.

As per the report, People's Bank of China (PBC) may also seek to prevent excessive strengthening of the yuan to maintain the competitiveness of Chinese ...