SHANGHAI, Nov 2 (Reuters) - China's yuan strengthened in early trade on Thursday, breaching a key threshold, supported by heavy dollar selling after the central bank lifted its official fixing by the most in more than three weeks.
Prior to market opening on Thursday, the People's Bank of China (PBOC) set the midpoint rate at 6.6196 per dollar, 104 pips or 0.16 percent firmer than the previous fix of 6.63 on Wednesday.
The move in Thursday's official guidance rate was the biggest one-day strengthening in percentage terms since Oct. 11.
The spot market opened at 6.5940 per dollar and rose to a high of 6.5827 at one point in early trade.
Spot yuan breached the psychologically important 6.6 per dollar for the first time since Oct. 17.
Traders said gains in the Chinese currency were driven by corporate dollar selling, which forced some market participants to follow and sell their dollar positions to reduce losses.
As of 0148 GMT, the onshore spot yuan was trading at 6.5858 per dollar. Its offshore counterpart was trading 0.05 percent weaker than the onshore spot at 6.5890 per dollar.
(Reporting by Winni Zhou and John Ruwitch; Editing by Jacqueline Wong)