USD/CNH briefly spikes to its highest level since 28 July 2017
The dollar's momentum looks unrelenting so far today, with the offshore Chinese yuan falling to almost a year's low against the greenback. To put things into context, the offshore yuan has weakened by almost 5.6% since 14 June. Remember when we talked about the yuan devaluation back in 2015 here? That was only a 3.8% jump.
The market has been a little edgy to move things above the 6.70 barrier - after verbal intervention by PBOC officials earlier in the month - but things are now starting to nudge higher once again and this could be the next leg in the upside move.
Chinese officials will certainly be concerned by further weakness in the yuan, but in the context of a trade war with the US, they may be willing to accept some lost ground here if it means gaining ground elsewhere to fight back against Trump's policies.
So long as the deterioration isn't rapid and "out of control", I think they'd be willing to allow this to run for just a bit more.
