The offshore yuan has fallen past 7.23 against the U.S. dollar, approaching its lowest point in over three months. This drop is mainly due to ongoing worries about potential U.S. tariffs, making its future uncertain.
Traders expect the yuan’s weakness to continue into next year. The possibility of higher tariffs during Donald Trump’s presidency could further strain China’s delicate economic recovery.
China Holds Loan Prime Rates Steady
Meanwhile, investors eagerly await the People’s Bank of China’s decision on the Loan Prime Rate (LPR) this Wednesday. They anticipate that the one-year and five-year rates will stay at 3.1% and 3.6%, respectively.
Additionally, markets are closely watching an investment summit in Hong Kong. At this event, top Chinese officials and leaders from major economic and financial institutions will discuss recent developments in China’s financial sector.
At the same time, the yuan has gained some support from stronger-than-expected official guidance and tighter liquidity in offshore markets. The People’s Bank of China set its midpoint rate at 7.1911 per dollar to prevent the currency from weakening further.
