Spot yuan also declined on Tuesday, opening at 6.3700 and then sliding a mere 3 pips to close at 6.3703.
The yuan posted a record monthly decline against the dollar in May on worries that the Chinese economy may be cooling more rapidly than earlier expected.
The dollar index, which the central bank frequently uses as a reference when setting the midpoint, declined in overnight trading alongside global equity markets, as a brief spurt of optimism over a bank rescue in Spain wore off.
The midpoint fix was set at 6.3292 per dollar, sharply down from Monday's fix but slightly stronger than the spot closing price of 6.3694 that day.
China's yuan traded further from the central bank's daily fixing than ever before on Monday, as policymakers appear increasingly content to tolerate a moderately weak currency as long as it avoids sharp swings.
However, this was not due to volatility in spot prices but rather due to movements in the fixing. The central bank has strengthened the midpoint but open and closing spots stayed in the same range they have traded in since May 31. This effectively dragged spot prices away from the midpoint by 0.83 percent.
The central bank widened the yuan trading band in April, allowing spot prices to diverge from the official fix by 1 percent, up from 0.5 percent.
On Tuesday, however, the yuan's furthest move away from the midpoint stopped at 0.77 percent away from the fixing.
"Realistically speaking, in recent days we've been paying attention to Europe and to whether the US is going have another round of monetary easing or not," said a trader at a joint stock Chinese bank.
Traders said that in addition to concerns about markets in Europe and the United States, customer appetite for dollars remains strong, maintaining downward pressure on the yuan's exchange rate.
The weakening value of the onshore yuan has caused offshore non-deliverable forward (NDF) contract spreads to shrink slightly. NDFs continue to trade at a rate that implies slight depreciation of less than 1 percent for the yuan this year.
The offshore yuan exchange rate remains tightly bound to the onshore rate as it has since February.