Date
14 November 2018
Despite its sudden fall on Thursday, the yuan has surged more than 8 percent against the dollar in the past year on the weakness of the US currency. Photo: Bloomberg
Despite its sudden fall on Thursday, the yuan has surged more than 8 percent against the dollar in the past year on the weakness of the US currency. Photo: Bloomberg

Yuan posts biggest one-day decline since 2015 devaluation

China’s yuan fell 1 percent against the US dollar, its biggest one-day decline since its surprise devaluation in 2015.

The currency declined as much as 1.5 percent in Shanghai on Thursday before closing at 6.3260 yuan.

Despite the sudden fall, the yuan has surged more than 8 percent against the dollar in the past year on the weakness of the US currency, the Wall Street Journal said. 

In the same period, the euro has jumped 15 percent against the dollar while the pound has strengthened 11 percent, the newspaper said.

The yuan’s fall on Thursday appeared to be driven by market forces rather than official action, the Journal said, citing traders and analysts.

Bloomberg said the currency extended its losses after official data showed that China’s trade surplus more than halved to US$20.34 billion in January from the previous month, and investors speculated controls on outward cash flows will be eased.

Earlier, the People’s Bank of China set the dollar’s reference rate at 6.2822 yuan, or 0.1 percent stronger than its guidance the day before, the Journal said.

The yuan’s sudden drop on Thursday comes amid heightened trade tensions between the United States and China, the newspaper said.

The US trade deficit in goods with China last year grew 12.1 percent to its highest level since 2008.

– Contact us at [email protected]

RC/CG

EJI Weekly Newsletter

Please click here to unsubscribe