Yuan slides to 11-year low versus US dollar

Business | 22 Aug 2019 3:28 pm

China’s yuan slipped to a new 11-year low against the US dollar today, despite support from major state-owned banks in both the spot and forwards markets, Reuters reports. 

Before the market opening, the People's Bank of China (PBOC) set the midpoint rate at 7.049 per dollar prior to market open, weaker than the previous fix of 7.0433.

Spot yuan slid to 7.0752 in early trade, its weakest since March 2008. It was changing hands at 7.0740 at midday, 107 pips away from the previous late session close.

State-run banks seen were receiving dollar liquidity in the forwards market before selling the greenback in the onshore spot market, two traders with knowledge of the matter said. One of them said state banks were seen selling dollars at around 7.07 yuan in the spot market to prevent sharper losses in the local unit.

The moves injected a note of caution, fueling speculation that authorities may be trying to establish a floor for the yuan around that level in the near term, the trader added.

 

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