Yuan drops through 6.60 level as Beijing signals it wants a weaker currency amid trade-war threat

The Chinese yuan dropped through the 6.60 level against the US dollar for the first time in six months after the People’s Bank of China (PBOC) lowered the midpoint price by 0.6 per cent on Wednesday morning, a further signal that the central bank wants a weaker yuan in its armoury in the event of an all-out trade war.

Offshore yuan traded at 6.6093 per dollar during early trade on Wednesday and then further lowered to 6.6189 in the evening, down 0.6 per cent from Tuesday.

This is the first time it has fallen through 6.60 – the lower end of many analysts’ predictions for the currency this year – since mid December.

The offshore yuan traded in Hong Kong bounced slightly to 6.60 at around 8pm Hong Kong time while onshore yuan mainly traded in Shanghai closed at 6.6052.

The currency is now down 3.6 per cent since June 13, having dropped for the last 10 days in a row, its longest losing streak in four years. The decline started when the PBOC decided not to follow the US Federal Reserve in raising interest rates on June 14.