Offshore yuan weakens to lowest levels since 12 July 2017
The PBOC basically gave an open invitation to the market at the fixing today (above 6.70) and the market is taking it all in without hesitation. The dollar has been on a tear against all currencies so far in trading, and the Chinese yuan is no exception to that.
And with China's FX regulator not wanting to step on the brakes, we're seeing the next move with traders now starting to talk about the possibility of a test of the 7.00 level. Since 14 June, the offshore yuan has fallen by 6.5% against the greenback. Suddenly, the 2015 devaluation looks pale in comparison.
Deliberate or not, it continues to invite a lot of questions on trade war retaliation as well as concerns on capital outflows. With growth already slowing down in the country, it's going to be a tough balancing act moving ahead for Chinese officials.
