The Chinese yuan hit a five-and-half-year low against the U.S. dollar in early trade on Wednesday. That came after China's central bank set the official midpoint at its lowest level since November 2010. Let's take a look at the details.

The People's Bank of China set Wednesday's yuan/dollar midpoint rate at 6.6857, weakening 263 basis points from Tuesday's mark. The onshore yuan then moved to its lowest level since November 2010 as it hit 6.6940 against the dollar in early trading.

Meanwhile, the offshore yuan also felt depreciation pressure as it touched 6.7078 in early trading Wednesday. That was the currency's lowest mark against the dollar in almost a year.

Analysts noted that the dollar also drove the yuan down on Tuesday as it rose over half a percent against a basket of major currencies.

Meanwhile, America Merrill Lynch cut its outlook for the yuan/dollar rate through the end of the third quarter to 6.8 from 6.7. That came as a former Chinese banking regulator said that China might implement tighter regulations on capital management. Those regulations could include such measures as taxes on forex currency trade.