8/12/2019, 10:27 AM (Source: TeleTrader)
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Yuan drops to record low in over eleven years

The official exchange rate of China's currency remained well above seven per dollar on Monday and hit 7.0698 for the first time since March 18, 2008. The yuan's weakening threatens to spoil the renewal of risk appetite in stock markets. It comes after the People's Bank of China today set the reference onshore level at 7.0211 compared to the previous 7.0136 midpoint and closing level of 7.0615. Trading is allowed within 2% from the fix, which today actually landed stronger than expected.

The central bank's daily update has become one of the most closely watched indicators for markets on a global level amid the worsening in relations between the most populous nation and the United States. PBoC also said it would inject 30 billion yuan in seven-day reverse repurchases, translating to downward pressure on the yuan, also known as renminbi. The administration in Washington has labeled China a currency manipulator, prompting a halt in purchases of American farm goods and an effective breakdown in bilateral talks.

The dollar was 0.08% up at 10:25 am CET, selling for 7.0681 yuan. The offshore rate was 0.17% in the green at 7.11037 after hitting 7.1113, last seen on August 6. On that day, it hit the highest mark since inception in 2011.

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