SHANGHAI: China's yuan inched higher against the dollar on Tuesday, as strength in the greenback was offset by stronger demand for the Chinese currency and as rate cut expectations eased.

Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at a fresh two-week low of 6.4842 per dollar, 2 pips weaker than the previous fix of 6.4840.

In the spot market, onshore yuan opened at 6.4830 per dollar and was changing hands at 6.4802 at midday, 60 pips firmer than the previous late session close.