China's yuan eased against the US dollar on Wednesday after the central bank set the daily midpoint at its strongest level in 20 months, prompting a rush of dollar buying by corporates. Prior to market opening on Wednesday, the People's Bank of China (PBOC) set its official yuan midpoint at 6.4920 per dollar, breaching the key threshold 6.5 per dollar level.

Wednesday's official midpoint was 159 pips, or 0.24 percent, firmer than Tuesday's fix of 6.5079 and was the strongest since May 3, 2016. In the spot market, the onshore yuan opened at 6.4988 per dollar and was changing hands at 6.5057 at midday, 108 pips weaker than the previous late session close and 0.21 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 95.76, weaker than the previous day's 95.93. The global dollar index rose to 91.917 from the previous close of 91.872.

Copyright Reuters, 2018