The Chinese yuan fell today to reach the lowest level in 11 years against the U.S dollar amidst persisting trade concerns, which prompted the Chinese governmental banks to support the currency.
As of 12:40 GMT, the Chinese currency fell 0.32 percent at 7.0847 per dollar, while the offshore yuan dropped 0.26 percent to 7.0859 per dollar.
Meanwhile, there are lower glimpse of hopes that the America and Chinese side would reach a deal ahead of the new U.S. tariffs on Chinese imports scheduled for September 1.
President Donald Trump said on Wednesday that he was the “the chosen one” to deal the trade imbalances with the Chines side, ignoring warnings that additional tariffs would also hurt the U.S economy.
As before the market opened, the People's Bank of China (PBOC) set the yuan midpoint rate at 7.049 per dollar before the market opened, weaker than the previous fix at 7.043.
The rest of the currencies remained in a tight position ahead of a speech scheduled to be delivered by Federal Reserve Chairman Jerome Powell at Jackson Hole, which will be closely examined after a reversal in the U.S. Treasury yield curve highlighted the risk of recession in the United States.
“State-run banks seen were receiving dollar liquidity in the forwards market before selling the greenback in the onshore spot market,” two traders with knowledge of the matter said and reported by Reuters.
Despite the U.S. decision to delay tariffs on some Chinese goods.... If the United States rides roughshod over China's opposition and impose any new tariffs, China will be forced to adopt retaliatory actions," Chinese Ministry of Commerce spokesman Gao Feng said at a press conference.
The dollar index snapped its earlier losses, rebounding from a low of 97.99
to trade at 98.21, ahead of U.S. flash manufacturing and services PMI for
August due at 13:45 GMT.