SHANGHAI, June 20 (Reuters) - China's yuan fell to seven-month lows against the dollar on Thursday as lower central bank guidance for the currency spurred market speculation that authorities may be prepared to see it weaken.

At 1229 GMT, the yuan was 0.05% lower at 7.2605 to the dollar, its weakest since November and only 11 pips from the top of a narrow 2% daily trading band, the mid-point of which is set by the People's Bank of China (PBOC).

Analysts pointed to the PBOC's weaker daily fixings of the mid-point as a sign the central bank was allowing the currency to fall, as the dollar shows signs of peaking broadly and China prepares to ease monetary settings further.

"This might indicate that the People's Bank of China is willing to let the yuan weaken further to manage depreciation pressure," Charu Chanana, head of FX strategy at Saxo, wrote.

Chanana said the moves showed market participants seemed ready to sell the yuan at the slightest sign of China expanding its easing measures or loosening its grip on fixings.

"The yuan's direction remains clear, although the pace of depreciation is likely to be measured," she said in the note.

The yuan has been under pressure since early 2023 as concerns about China's anemic property sector, weak consumption and falling yields drive capital flows out of yuan, and foreign investors stay away from its sickly stock market.

Yet, because of how the PBOC manages it within a band, the yuan's 2.2% drop against the dollar this year pales in comparison to peers such as Japan's yen, which is down 11%.

The official trade-weighted CFETS index was last published on June 14 and was at 99.89, up 2.5 points so far this year.

In a sign of the pent-up pressure, the yuan hit the lower end of the band in some cash settlement transactions on Thursday, traders said.

Xing Zhaopeng, senior China strategist at ANZ, said the PBOC needed to set weaker mid-points to stop the currency from hitting the band limits in cash trades, because a lack of liquidity would affect sentiment. The central bank will continue to allow the yuan to drift down in an orderly manner, Xing said.

Becky Liu, head of China macro strategy at Standard Chartered, said it could not be concluded from Thursday's fixing that there was an immediate change in the PBOC's FX policy stance, but there were signs it may be slightly relaxing the lower bound of the daily yuan trading band against the dollar.

Earlier on Thursday, China left benchmark lending rates unchanged at a monthly fixing, matching market expectations and underscoring Beijing's monetary easing efforts continue to be constrained by the weak yuan.

The offshore yuan was trading 231 pips weaker than the onshore spot at 7.2833 per dollar. Key onshore vs offshore levels: * Overnight dollar/yuan swap onshore -7.50 pips vs. offshore -7.50 * Three-month SHIBOR 1.9 % vs. 3-month CNH HIBOR 3 %

(Reporting by Shanghai Newsroom; Editing by Jacqueline Wong and Mark Potter)