China's yuan fell further against the US dollar on Thursday, reaching a three-month low as the greenback remained strong and the official midpoint setting was the softest since January. On Wednesday, the yuan dropped 0.5 percent against the dollar, its biggest one-day loss in percentage terms since March 1. Prior to Thursday's market opening, the People's Bank of China lowered the midpoint rate to a weaker-than-expected 6.3732 per dollar, the softest since January 24. Thursday's fixing was 62 pips or 0.1 percent weaker than the previous fix of 6.3670.
In the spot market, the onshore yuan opened at 6.3664 per dollar and eased to 6.3705 at one point in morning trade, the weakest since January 24. By midday, the spot yuan pared some losses and was changing hands at 6.3663, 33 pips weaker than the previous late session close.
The yuan's losses have come just before of important trade talks between senior Trump administration and Chinese officials. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 98.25, weaker than the previous day's 98.29.
The offshore yuan was trading 0.03 percent firmer than the onshore spot at 6.3646 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.469, 1.48 percent weaker than the midpoint.
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