SHANGHAI, June 26 (Reuters) - China's yuan weakened to a
fresh seven-month low against a broadly stronger dollar on
Wednesday, with a weaker central bank guidance also dragging on
the currency and putting it on course for its sixth straight
monthly decline in June.

By 03:10 GMT, the yuan was 0.04% lower at 7.2659
to the dollar after trading in a range of 7.2620 to 7.2663.
    The yuan has stayed within a whisker of the weak end of its
daily official trading band over the past week as capital
outflows into the higher-yielding dollar and speculation the
central bank is allowing it to depreciate weigh on sentiment.
    Prior to the market opening, the People's Bank of China
(PBOC) set the midpoint rate, around which the yuan
is allowed to trade in a 2% band, at 7.1248 per dollar, its
weakest level since November and 1,450 pips firmer than a
Reuters' estimate.
    Based on Wednesday's official guidance, the yuan is allowed
to drop as far as 7.2673.
    "(The) PBOC fixed the USDCNY (dollar yuan pair) reference
rate higher for the sixth consecutive session at 7.1248 vs.
previous 7.1225, reinforcing a message that PBOC is creating
headroom for USDCNY to rise gradually," said Maybank analysts in
a note.
    The spot yuan opened at 7.2620 per dollar and was
last trading 31 pips lower than the previous late session close
and 1.98% weaker than the midpoint.
    The U.S. dollar strengthened overnight, bolstered by hawkish
comments from Federal Reserve officials as well as data showing
a stable U.S. housing market, both suggesting that the central
bank will not be in a rush to kickstart its rate-cutting cycle.
    Traders are eagerly awaiting Friday's release of the U.S.
personal consumption expenditures (PCE) price index - the Fed's
preferred measure of inflation, with economists polled by
Reuters expecting the annual growth to ease to 2.6% in May.
    The yuan is down 0.3% against the dollar this month, and
2.3% weaker this year. It has been under pressure since early
2023 as domestic woes around a depressed property sector,
anaemic consumption and falling yields drive capital flows out
of yuan, and foreign investors stay away from its struggling
stock market.
    The offshore yuan traded at 7.2909 yuan per dollar,
down about 0.01% in Asian trade.
    The dollar's six-currency index was 0.009% lower
at 105.66. 

Key onshore vs offshore levels:
    * Overnight dollar/yuan swap onshore -8.20 pips vs. offshore
-8.20
    * Three-month SHIBOR 1.9 % vs. 3-month CNH HIBOR 3
%

LEVELS AT 03:09 GMT GMT
 INSTRUMENT   CURRENT    UP/DOWN(-)    % CHANGE    DAY'S HIGH  DAY'S 
              vs USD     VS. PREVIOUS  YR-TO-DATE              LOW
                         CLOSE %                               
 Spot yuan    7.2659     -0.04         -2.26       7.262       7.2663