Offshore yuan breaks 6.79 against US dollar, refreshing its lowest level in six years
Chinese banks may have sold US dollars in the morning session to support the currency, according Bloomberg report
Offshore yuan broke the critical level of 6.79 against the US dollar to hit a low of 6.7920 in morning trading in Asia, refreshing the lowest level in six years. It’s trading at 6.7868 per dollar as of 12 am in Hong Kong.
Onshore yuan was trading at 6.7771 per dollar in Shanghai.
Chinese banks may have sold US dollars in the morning session to support the currency, according a Bloomberg report citing unnamed traders.
The People’s Bank of China cut the daily reference rate for the yuan by 31 basis point to 6.7736 on Thursday. Traders are allowed to trade up to 2 per cent either side of the reference rate of the day.
The currency’s recent sharp depreciation is widely viewed as mainly attributable to the significant strengthening of the US dollar on the increased prospects of an interest rate rise by the Federal Reserve this December.
“The Fed continues to ease potential election risk by suggesting the path to interest rate normalisation will be gradual, thus supporting risk sentiment in the face of an imminent hike,” said Stephen Innes, a senior trader at Oanda.