China’s central bank set the yuan U.S. dollar midpoint rate at 6.4891 Thursday, the biggest daily weakening in more than three months.

The yuan’s sharp drop against the dollar came after the greenback strengthened. The dollar index rose 0.8 percent overnight and continued its rally in early Asian trade  Thursday.

The dollar rose after China released data Wednesday showing exports surged more than expected in March. That indicates China's slowdown could be easing.