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Chinese offshore yuan falls to weakest level against dollar since 2010
SHANGHAI, Aug 5, 2019 (BSS/AFP) – The Chinese yuan fell to its lowest
level against the dollar since August 2010 in morning trade on Monday,
fueling speculation that Beijing is allowing currency depreciation to counter
threatened US tariffs.
The offshore currency weakened to 7.1085 to the dollar, days after US
President Donald Trump announced a plan to impose fresh tariffs on another
$300 billion in Chinese goods, escalating trade war tensions between the
world’s two biggest economies.
The onshore yuan also tumbled, hitting 7.0307 on Monday morning trade to
reach its lowest level since 2008.
Both the onshore and offshore yuan breached the 7.0 level against the
dollar, which investors see as a key threshold in currency value.
Trump has frequently accused China of artificially devaluing its currency
in order to support its exports — charges long denied by Beijing.
“It appears that the tariffs hike suggests the return of tit-for-tat moves
and a suspension of trade talks, and the PBOC sees no need to keep the yuan
stable in the near term,” Ken Cheung, a senior currency strategist at Mizuho
Bank Ltd, told Bloomberg News.
The Chinese central bank sets a daily central rate, which was at 6.9225
per dollar on Monday, 0.33 percent weaker than on Friday.
China allows the yuan to rise or fall two percent on either side of the
fixed daily rate to control volatility.
Trump jolted global stock markets last week when he issued the threat of
more tariffs just a day after US and Chinese trade negotiators revived talks
aimed at ending the year-long dispute.
Beijing has vowed to hit back if Washington goes ahead with its latest
duties set to begin September 1, while news that demand for US exports had
weakened has underscored concern that trade is becoming a trouble spot for
economies worldwide.
BSS/AFP/HR/0910