Home > News > Currency News > Detail
Bookmark and Share

China's Yuan Sinks Past Key Level, Will Test PBOC's Resolve

2018-07-12 11:00    Investing

China's Yuan Sinks Past Key Level, Will Test PBOC's Resolve Currency News

© Reuters. China's Yuan Sinks Past Key Level, Will Test PBOC's Resolve

(Bloomberg) -- Traders will be watching to see what Chinese policymakers do to defend the yuan after it tumbled past a key level against the dollar.

The yuan sank as much as 1.1 percent in overnight offshore trading to 6.7249, its biggest loss since January 2016, as a trade conflict with the U.S. worsened. When the Chinese currency last weakened past 6.7 earlier this month, central bankers vowed to keep it stable and to not deploy it as a weapon in the dispute -- helping spur a rebound. On Thursday, the People’s Bank of China set the daily reference rate at 6.6726, stronger than estimates compiled by Bloomberg.

Rising tensions between the world’s two largest economies have weighed heavily on China’s financial markets, with the yuan sinking more than 4 percent in the past month and the Shanghai stock index falling to a two-year low. State media have been calling for calm, with the Xinhua News Agency saying recent moves in asset prices are within a controllable range.

"The fixing is likely to serve as the primary tool" for intervention now, said Gao Qi, currency strategist at Scotiabank in Singapore. If that doesn’t work, then it’s likely officials will provide verbal support to slow the pace of the drop to avoid panic, he said.

The yuan was 0.3 percent lower at 6.6960 at 9:54 a.m. in Beijing, stronger than the offshore rate of 6.7120. The Shanghai Composite Index was up 0.6 percent after tumbling 1.8 percent on Wednesday. The gauge has fallen more than 20 percent from this year’s high. Hong Kong’s Hang Seng Index added 0.1 percent.

High-level trade talks between the U.S. and China have ground to a halt, according to five people familiar with the matter. The Trump administration on Tuesday released a proposed list of an additional $200 billion in Chinese goods to be hit with tariffs. China’s Commerce Ministry said the tariffs, which cover everything from refrigerators to handbags, are “totally unacceptable.”

CNYPBOC

0 traders reviewed this item, please leave a reply!

About FXYEAH | Broker Listing | Contribute | Contact Us | Sitemap | TagCloud
Disclaimer: All contents of site are only for your reference, don't suggest you do any investment decision, you should be responsible for your decision.