SHANGHAI: China’s yuan eased against the dollar on Wednesday, with market participants cautious ahead a Federal Reserve policy meeting and largely shrugging off strong upward adjustment of central bank guidance for the currency’s trading midpoint.

Meanwhile, the fast spread of Covid-19 infections had also dented sentiment, traders said.

The dollar/yuan rate “remains trapped by opposing forces of concerns over the current Covid wave and news of further easing of restrictions,” analysts at Maybank said in a note.

Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate at a new three-month high of 6.9535 per dollar, 211 pips or 0.3% firmer than the previous fix of 6.9746.

In the spot market, the onshore yuan opened at 6.9480 per dollar and was changing hands at 6.9618 at midday, 118 pips softer than the previous late session close.