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Yuan Watchers Say 7 Is No Longer a Sticking Point for China

  • Analysts say China will tolerate weaker yuan to support growth
  • Consensus growing days after ex-PBOC governor dismissed level
Chinese Yuan, Hong Kong Dollar and U.S. Dollar Banknotes
Photographer: Paul Yeung/Bloomberg
Updated on

Yuan watchers arguing that China shouldn’t be scared of the currency breaking 7 a dollar are being emboldened by a former central bank official’s support for their thesis.

In the four days since ex-governor Zhou Xiaochuan dismissed the importance of 7, at least six analysts published reports laying out why the People’s Bank of China is likely to tolerate a weaker yuan. They say policy makers are more likely to prioritize supporting economic growth amid a worsening standoff with the U.S. over trade. The yuan was 0.1% weaker at 6.9075 per dollar Tuesday.