Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Offshore Yuan Smashing Support Level Leaves Record Low in Sight

Published 05/16/2019, 10:32 PM
Updated 05/17/2019, 12:00 AM
© Reuters.  Offshore Yuan Smashing Support Level Leaves Record Low in Sight

© Reuters. Offshore Yuan Smashing Support Level Leaves Record Low in Sight

(Bloomberg) -- The offshore yuan is moving closer toward a record low after breaking through a key level late Thursday.

The currency slid as much as 0.4% overnight, weakening rapidly past the 6.92 per dollar level it had held below for the previous three days. It was trading at 6.9260 at 10:29 a.m. in Shanghai. The yuan’s low of 6.9895 was reached in January 2017.

A stronger dollar and the Trump administration’s threat to blacklist Huawei Technologies Co. from buying essential components are renewing pressure on the yuan, and widening its discount to the onshore exchange rate. The offshore currency has tumbled about 2.7% this month, making it one of the world’s worst performers.

Traders are now watching closely to see if it will slide to as low as 7 a dollar.

"Markets continue to fret about the impact of the escalation in trade tensions," said Mitul Kotecha, a senior emerging-markets strategist at Toronto Dominion Bank. "Both the U.S. and Chinese sides appear to be digging in their heels, suggesting little chance of any resolution soon. I think 7 will be broken unless there is any progress on a deal."

The authorities may intervene to prop up the currency if it reaches the 6.98-6.99 level, according to Ken Cheung, senior Asian FX strategist at Mizuho Bank Ltd.

It’s not just dollar-driven weakness. The yuan also fell for a 13th day against a basket of trading partners’ currency on Friday, the longest losing streak on record. The onshore yuan fell 0.24% to 6.9005 a dollar.

To contact Bloomberg News staff for this story: Claire Che in Beijing at yche16@bloomberg.net;Livia Yap in Singapore at lyap14@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Magdalene Fung, Philip Glamann

©2019 Bloomberg L.P.

Latest comments

I feel truly terrible for individuals in this economy; I like everybody have been battling. At the same time I let you know what I've done I've taken life into my own particular hands being answerable for myself. I knew trading was the response for me and I've acquired distinctive courses at better places and the best course I've found far and away is at the site Emini S&P Trading Secret, simply Google them and discover them and do as I did they begin trading for yourself and take life into your own particular hands.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.