China Lets Yuan Weaken Past Key Level in Potential Exports Boost

China eased its tight grip on the yuan by weakening its daily reference rate past the keenly-watched 7.20 per dollar level amid the dramatically escalating trade war with the U.S.

- Bloomberg

The People's Bank of China (PBOC) set the so-called fixing at 7.2038 per dollar on Tuesday, the weakest since September 2023. It's the first time since President Donald Trump's November election that the fixing breached 7.20, a level seen by investors as a soft-red line for official intentions toward the managed currency.

The move triggered depreciation in the spot yuan despite a moderate improvement in risk sentiment in the stock market. The onshore yuan slid to the weakest level since September 2023, while the offshore currency hit a two-month low.