Advertisement

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

Reading Time:3 minutes
Why you can trust SCMP
2
The currency’s weakness followed a slew of downbeat data, suggesting that China’s economic recovery might have lost some steam. Photo: Reuters

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.

Advertisement

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

“Chinese exporters have been hoarding dollar receivables,” Barclays analysts said last week.

Advertisement
Advertisement