SHANGHAI: China’s yuan eased on Thursday against broad strength in the dollar after the US Federal Reserve’s outsized interest rate cut, although it recovered almost all losses on hope that the Fed’s easing offered Beijing leeway on its own monetary policy.

The Fed kicked off its easing cycle on Wednesday with a larger-than-usual half-percentage-point cut that Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation has eased.

The onshore yuan was 0.07% lower at 7.0833 to the dollar by 0346 GMT, after hitting a trough of 7.1099 earlier in the session.

Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.0983 per dollar, 59 pips weaker than a Reuters’ estimate of 7.0924.