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China’s Offshore Yuan Slides to Brink of Record Amid Tension

  • Currency slumps as tension with U.S. worsens over Hong Kong
  • History shows depreciation is often quick when PBOC allows it
General Images Of South Korean Won And Chinese Yuan Currency Notes
Photographer: SeongJoon Cho/Bloomberg
Updated on

China’s offshore yuan tested the weakest level on record on speculation the government would be willing to permit a weaker currency in response to fresh punitive measures from the U.S.

The offshore rate dropped as much as 0.7% to 7.1965 per dollar on Wednesday, the lowest since Sept. 3 2019, when it reached an all-time low. Losses have steepened in recent weeks as the Trump administration stepped up rhetoric against China’s Communist Party over its handling of the coronavirus -- and its intention to crack down on dissent in Hong Kong.