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China’s yuan weakens past key threshold to 2-month low after slew of downbeat economic data
- China’s onshore yuan finished the domestic session on Friday at 6.9506 per US dollar, the weakest close since March 10
- The weakness followed a slew of downbeat data, suggesting that China’s economic recovery might have lost some steam
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China’s yuan weakened past a key threshold to a new two-month low against the US dollar on Friday before steadying as exporters rushed to settle their foreign exchange receipts and lock in profits.
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The yuan breached the psychologically important level of 6.95 per US dollar in early trading, as losses accelerated after the spot rate crossed the 200-day moving average of 6.94.
The currency’s weakness followed a slew of downbeat data, suggesting that China’s economic recovery might have lost some steam, with weak confidence holding back post-pandemic spending and growth.
However, currency traders said corporate clients emerged as US dollar sellers after the yuan weakened above the key 6.95 per US dollar level, in a move anticipated by analysts at Barclays.
“Chinese exporters have been hoarding dollar receivables,” Barclays analysts said last week.
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