The yuan eased against the dollar on Thursday to its weakest levels since early March, after the central bank fixed the softest midpoint in 3-1/2 months as the US Federal Reserve signalled an interest rate hike was on the table for June. As such, the People's Bank of China set the midpoint rate at 6.5531 per dollar prior to market open, 0.48 percent weaker than the previous fix of 6.5216.
In the spot market, the yuan opened at 6.5490 per dollar and was changing hands at 6.5428 at midday, easing 0.05 percent from the previous close, with traders saying the overnight close of 6.5398 had already factored in the dollar's global strength. Offshore one-year non-deliverable forwards contracts, considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.7415, or 2.79 percent weaker than the midpoint.