China's yuan weakened against the US dollar on Thursday after the central bank set the midpoint at the lowest level in two weeks and as domestic companies sought greenback amid concerns the local currency could weaken further. The People's Bank of China set the midpoint rate at 6.8896 per dollar prior to market open, the weakest level since April 12.
Thursday's fixing was 51 pips, or around 0.1 percent, softer than the previous fix, which was set at 6.8845, although traders and analysts say this midpoint is much stronger than their model's predictions of around 6.8967.
The spot market opened at 6.8920 per dollar and was changing hands at 6.8967 at midday after hitting a low of 6.8988 at one point, 40 pips weaker than the previous late session close and 0.10 percent softer than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
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