China"s yuan on Thursday eased from a six-month peak against the dollar hit a day earlier, as a weaker-than-expected official guidance discouraged investors from chasing the currency further. Prior to the market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.3719 per dollar, 23 pips weaker than the previous fix of 6.3693. However, many market analysts and traders said Thursday"s official guidance rate came in much weaker than their forecasts, a sign that authorities may be feeling uncomfortable with the recent yuan rally as it headed to the strongest level this year in both onshore and offshore trades. Thursday"s official fixing was 71 pips softer than Reuters" forecast of 6.3648. In the spot market, the onshore yuan opened at 6.3705 per dollar and was changing hands at 6.3693 at midday, 5 pips weaker than the previous late session close. The spot rate hit a six-month high of 6.3596 per dollar on Wednesday, not far from this year"s high of 6.3565, and is up about 2.5% year-to-date to become one of the best performing Asian currencies in 2021. Currency traders said despite persistent year-end corporate conversion of their FX receipts into yuan for various payments, some of their corporate clients were taking advantage of a cheaper dollar to load up on the greenback in morning deals. Analysts at Standard Chartered said they still see limited upside for the yuan, and expect the authorities to step up policy measures to counter renewed appreciation pressure. "The odds of heavy-handed direct intervention remain low, in our view, as recent CNY appreciation is largely fundamentally driven," they said in a note. "We think the most likely option to curb further appreciation is to raise the foreign-currency required reserve ratio further ... take more actions to reduce onshore banks" speculative positions by narrowing their net open position limits, expanding outbound investment channels, and re-introducing the counter-cyclical adjustment factor." Sources told Reuters earlier this month that a central bank-led self-regulatory group that helps to oversee China"s foreign exchange industry had asked commercial banks to cap the size of their proprietary trading accounts to limit financial institutions" speculation on the yuan. read more By midday, the broad dollar index fell to 95.973 from the previous close of 96.046, while the offshore yuan was trading at 6.3703 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.3719 6.3693 -0.04% Spot yuan 6.3693 6.3688 -0.01% Divergence from midpoint* -0.04% Spot change YTD 2.50% Spot change since 2005 revaluation 29.94% Key indexes: Item Current Previous Change Thomson Reuters/HKEX CNH index 102.08 102.09 0.0 Dollar index 95.973 96.046 -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 * 6.3703 -0.02% Offshore non-deliverable forwards ** 6.541 -2.59% *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. .