USD/CNY: Yuan breaches 6.7 for the first time in nearly a year
- CNY sold-off into US-Sino trade war fears.
- Yuan sell-off stalls as the Chinese state-owned banks intervene.
The Yuan extends its downward spiral and broke the key 6.70 support area versus its American rival for the first time since September 2017, now recovering some ground to trade near 6.6950 levels.
The latest recovery attempt in the Yuan can be attributed to the Reuters report that major state-owned Chinese banks are seen swapping Yuan for US dollars in forwards and immediately selling them into the spot market, which in turn offers the much-needed respite to the Yuan.
The ongoing weakness in the Yuan is mainly driven by jittery Chinese stock markets amid US-Sino trade war fears, as caution prevails ahead of the July 6 deadline for the US tariffs on $34 billion worth of Chinese goods. China is also expected to retaliate with tariffs on the US goods.
Meanwhile, the PBOC set Yuan mid-point at the lowest level since Aug. 25, 2017, at 6.6497 today.
Also Read: USD/CNH: Offshore Yuan hits the lowest level since August 2017
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
