SHANGHAI/SINGAPORE: China’s onshore yuan on Thursday weakened to the lowest level against the dollar in almost 14 months, touching 7.31 per dollar in early trade before paring losses.
After briefly weakening below 7.3 per dollar for the first time since Nov. 3, 2023, it recovered the losses. At 2:25 GMT, the yuan changed hands at 7.2992, barely changed from the last close.
Before the market open, the People’s Bank of China set the yuan midpoint at 7.1879 per dollar, 1,037 pips stronger than Reuters’ estimate.
The strong guidance rate reflects the central bank’s unease over the currency’s declines as China struggles to revive its economy and faces the prospect of heightened trade tensions with the United States when President-elect Donald Trump returns to the White house on Jan. 20.
China’s yuan poised for third straight yearly drop, Hong Kong dollar shines
The yuan’s weakness on the first trading day of 2025 comes as China’s 30-year treasury yield fell below 1.9% to a record low in early trade.
The Chinese currency lost 2.8% against the greenback in 2024 in its third straight year of losses, hit by a triple-whammy of a broadly stronger greenback, falling Chinese yields and rising trade tensions with other economies.
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