China sets yuan midpoint near 1-month low, still firmer than expected

China's central bank set the yuan midpoint rate at a near one-month low on Wednesday, though not as weak as market forecasts - a sign investors interpreted as authorities' discomfort toward excess weakness in the local unit.

The People's Bank of China (PBOC) set the midpoint rate - around which the yuan is allowed to trade in a 2% band - at 7.1588 per U.S. dollar prior to market opening, 23 pips weaker than the previous fix of 7.1565 and the weakest since July 12.

The fixing was much stronger than market expectations, traders and analysts said. It was also 610 pips firmer than Reuters' estimate, the widest such discrepancy since July 26.