China's yuan weakened against the US dollar on Thursday, despite major state-owned banks offering dollar liquidity to meet corporate demand for the greenback, traders said. The People's Bank of China set the midpoint rate at 6.9051 yuan per dollar prior to market open, with the yuan marginally firmer than the previous fix 6.9066.

The spot market opened at 6.9029 per dollar and was changing hands at 6.9055 at midday, 43 pips weaker than the previous late session close and 0.01 percent softer than the midpoint. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.13, flat with the previous day's 94.13.

The global dollar index fell to 99.608 from the previous close of 99.669. The offshore yuan was trading 0.06 percent weaker than the onshore spot at 6.9097 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 7.1085, 2.86 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.

Copyright Reuters, 2017