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Central Banks

Yuan Bears Defy PBOC to Weaken Currency Past 7 Per Dollar

  • Dollar rally pushes yuan to the weakest level since 2020
  • PBOC has set fix stronger than expected to slow yuan’s slide
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Offshore Yuan Weakens Past 7 Per Dollar
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The yuan extended declines after breaching the 7 per dollar level as concerns that the Federal Reserve may deliver an outsized rate hike next week eclipsed a string of attempts from China’s central bank to support the currency.

Both the onshore and offshore yuan fell to the lowest since July 2020, even as the People’s Bank of China set the currency fixing at 456 pips stronger than the estimates in a Bloomberg survey, on concern that Fed rate hikes would exacerbate China’s yield gap with the US and drive outflows. PBOC’s fixing pushback Friday also fell short of the record 598 pips seen Wednesday.