SHANGHAI: China's yuan strengthened against the US dollar on Thursday, supported by corporate dollar selling, with the currency poised for its second straight winning month.

Onshore yuan was little affected by a weaker official fixing or the South Korean central bank's decision to raise interest rates for the first time in more than six years.

"The onshore yuan strengthened on corporate flows and was not affected by volatility in the won as many domestic market participants were not trading the currency pair," a trader at a Chinese bank in Shanghai said.

However, big swings in the Korean currency would eventually affect the yuan's value against a basket of currencies of China's trading partners, the trader said. The weight of the won accounts for 10.77 percent in the basket index.

Prior to market opening on Thursday, the People's Bank of China set the midpoint rate at 6.6034 per dollar, 23 pips or 0.03 percent weaker than the previous fix of 6.6011.

In the spot market, the onshore yuan opened at 6.6120 per dollar and was changing hands at 6.6047 at midday, 153 pips firmer than the previous late session close.

If the yuan ends the late night session at the midday level, it would have gained 0.44 percent against the dollar for the month - its second straight winning month. The yuan strengthened around 0.28 percent in October.

On a year-to-date basis, the renminbi will have gained around 5.2 percent.

Its offshore counterpart fell to a low of 6.6168 per dollar at one point on Thursday before trading 0.11 percent weaker than the onshore spot rate at midday.

Corporate dollar sales supported spot yuan trade on Thursday morning, but the market is awaiting progress on US tax reform legislation which could bolster the greenback. A final Senate vote could take place on Thursday or Friday.

The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 95.09, weaker than the previous day's 95.1.

The global dollar index fell to 93.14 from the previous close of 93.164.

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 6.7665, 2.41 percent weaker than the midpoint.

One-year NDFs are settled against the midpoint, not the spot rate.