SHANGHAI, Aug 27 (Reuters) - The yuan eased on Friday against the U.S. dollar due to expectations that China"s central bank will loosen monetary policy as the economy slows down, while the U.S. central bank is expected to begin tapering its stimulus. After a weaker midpoint rate setting by the People"s Bank of China, the spot yuan opened at 6.4860 per dollar and was changing hands at 6.4832 at midday, 17 pips weaker than the previous late session close. Bank of America said in a note that it now expects the yuan to depreciate to 6.60 per dollar by the end of this year, citing the prospect of a rate cut. "We expect this to result in monetary policy divergence between an easing central bank in China and tapering Federal Reserve," the bank said, adding slowing Chinese exports would also weaken the yuan. Ting Lu, Chief China Economist at Nomura, said in a note on Friday that the probabilities of an interest rate cut and a reduction in banks" required reserve ratio were both rising, due to the "rising risk of a worse-than-expected slowdown." "In coming months, we expect China" GDP growth to drop significantly, driven by the latest wave of COVID-19, slowing exports, property tightening and the campaign to reduce carbon emissions," Lu wrote. Earnings at China"s industrial firms in July slowed for the fifth straight month, data released on Friday showed. In contrast, U.S. corporate profits surged to a fresh record high in the second quarter, boosted by robust demand and higher prices. The dollar was boosted on global markets ahead of the upcoming Jackson Hole Symposium for central bankers, hosted by the Fed. The market"s focus is locked on Fed Chair Jerome Powell, in case he offers any insight into plans for tapering during his speech to the symposium later in the global day. Expectations rose after Fed presidents James Bullard, Esther George and Robert Kaplan urged the central bank to begin paring bond purchases. The yuan market at 5:01AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4863 6.473 -0.21% Spot yuan 6.4834 6.4815 -0.03% Divergence from -0.04% midpoint* Spot change YTD 0.69% Spot change since 2005 27.66% revaluation Key indexes: Item Current Previous Change Thomson 98.75 98.73 0.0 Reuters/HKEX CNH index Dollar index 92.978 93.053 -0.1 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.4808 0.04% * Offshore 6.6549 -2.53% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Shanghai Newsroom) Our Standards: The Thomson Reuters Trust Principles.