The Chinese renminbi fell sharply against the dollar in the offshore market on Friday, with investors bailing from what had been one of their most surefire bets on currency appreciation following a big selloff in Asian currencies this week.
The sudden selling pushed the offshore yuan or "CNH" as it is known, to its weakest point since the Hong Kong market was launched in June 2010 and even pushed the yuan non-deliverable market to price in a mild depreciation - a rare bearish view on a currency that has gained in recent years.
The CNH was trading at 6.50 versus the US dollar, well below an intraday low of 6.56. Against the onshore yuan, it was trading at a record discount of more than 0.15 yuan. Benchmark one-year non-deliverable forwards jumped on Friday, a day after the contract indicated a yuan depreciation for the first time in 2-1/2 years. Spot yuan traded at 6.3920 per dollar, marginally weaker than Friday's fixing of 6.3840 and closeted in a narrow 0.2 yuan band.
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