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The Chinese currency fell again this week, as investors became more cautious about the slowdown in the country's economic growth and the intensification of the trade dispute with the United States.
The yuan
USDCNH, + 0.0575%
rose to 6.9725 for a dollar in offshore trading on Friday, its weakest for almost two years. The currency fell against the greenback each day this week and hit Thursday its lowest level of August. The yuan's prolonged pullbacks were announced on Friday after China reduced the daily trading range of the currency against the dollar for onshore transactions.
After a sale of nearly 7% since the beginning of the year, the yuan is about to reach 7 to the dollar – a symbolic threshold that could spark new sales – if companies and businesses Chinese individuals decide that this means that they need to evict their capital before any further decline. The last yuan traded in May 2008 was less than 7 to one dollar in the onshore market, while offshore trading was only introduced in 2010.
The weakness of the currency comes during a week of ups and downs for the world markets. Chinese stocks jumped earlier this week, but reversed their course, triggering a sell that hit the US market on Wednesday. US indices rebounded Thursday, recovering some losses. Stocks in mainland China and Hong Kong were mixed on Friday morning.
Meanwhile, the US dollar, as evaluated by the ICE US Dollar Index
DXY, + 0.13%
which measures the greenback against six rivals, remained almost stable at 96.632, pulling back from the peak hit for 10 weeks on Thursday due to the weakness of the euro
EURUSD -0.2198%
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