China's yuan weakened against the dollar on Thursday supported by corporate demand for the greenback, as persistent downward pressure in the local currency on bets of more losses offset a firmer midpoint. The People's Bank of China set the midpoint rate at 6.9435 per dollar prior to market open, firmer than the previous fix at 6.9489.
The spot market opened at 6.9480 per dollar and was changing hands at 6.9467 at midday, 48 pips weaker than the previous late session close and 0.05 percent softer than the midpoint. State banks were seen selling dollars to curb any sharp falls in the Yuan, which slumped to 8-1/2-year lows last month.
The weaker Yuan, even in the wake of a broad pullback in the dollar over the past 24 hours, reflected the persistent depreciation pressure amid worries of capital outflows, slower economic growth and liquidity stress in money markets. Amid this backdrop, companies were buying dollars as they took advantage of the greenback's retreat from 14-year-high against a basket of currencies.