Bloomberg quoted people familiar with the matter, as saying that China is said to study the impact of gradual Yuan devaluation to counter the US-China trade spat.
China is evaluating the potential impact of a gradual CNY depreciation.
Senior Chinese officials are studying a two-pronged analysis of the Yuan.
The first part looks at the effect of using the currency as a negotiation tool with the US.
The second part looks at what would happen if China depreciates the Yuan to offset any trade impact.
The AUD/USD pair dropped back towards the 0.7670 region on the above headlines.
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