Chinese Yuan Extends Losses, Reaching 14-Month Low
Worsening trade dispute between the United States and China drove the Chinese currency to a fresh 14-month low. The onshore spot market opened at 6.8571 per dollar, then weakening to a low of 6.8965, its lowest level since May 15, 2017. The offshore yuan was trading at 6.8968 per dollar.
The Chinese yuan is on track to fall for eight consecutive weeks, its longest weekly losing streak since the exchange rate mechanism was unified in 1994.
The yuan's rapid depreciation has prompted market talk over the potential for the yuan to breach 7 per dollar in the near term. Major state-owned Chinese banks were seen selling dollars on Friday afternoon, in order to support the national currency. State-owned banks sold dollars in the forex market regularly in late 2015 and 2016 in what some traders believed was part of official efforts to prop up the yuan.
The US administration plans to propose 25% instead of 10% on $200 billion of imported Chinese goods. China has responded that it would retaliate if the US continues to impose fresh trade tariffs.