(Yicai Global) May 10 -- The onshore yuan-dollar spot exchange rate closed at 6.3784 yesterday, erasing all redback gains over the past three months.

The yuan-dollar parity rate, set by the People's Bank of China, fell 69 basis points to 6.3733, slipping for the third straight day and also hitting a three-month low. The market-based exchange rate is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The offshore yuan suffered a similar fate, opening at 6.3655 but falling as low as 6.3834 during intraday trading to hit a new low since Jan. 24.

In comparison, the soaring dollar index peaked at 93.4253, after breaking through the 93-point milestone on May 8 for the first time this year. The dollar index rose by more than 2 percent in April while the yuan-dollar central parity rate slid to 6.3393 from 6.2881. The spot rate slumped to 6.3439 from 6.2733.

There is not a strong expectation for the yuan to decline, market participants said. The current devaluation is merely a reflection of the dollar's strong appreciation, and where the central parity rate heads from here will depend on how long the greenback can string out this rally, they added.

Editor: James Boynton