China’s yuan falls to lowest level against US dollar since 2008 global financial crisis

[Hamartia Antidote]

Yuan falls to lowest level against US dollar since 2008 global financial crisis

China’s onshore yuan closed on Friday at the weakest level since the 2008 global financial crisis as the US dollar soared on expectations of more interest rate increases.

www.scmp.com

China’s yuan resumed its weakening trend against the US dollar on Friday, finishing the domestic session at the weakest level since the global financial crisis of 2008 as the US dollar soared on heightened expectations of more interest rate increases.
The yuan gained some support on Thursday after a Bloomberg report that China is considering reducing the coronavirus quarantine time for inbound travellers, citing unidentified sources, though other details were scant.
Prior to the market opening on Friday, the People’s Bank of China (PBOC) set the midpoint rate at 7.1186 per US dollar, 2 pips firmer than the previous fix 7.1188.
In the spot market, the onshore yuan opened at 7.2320 per US dollar and was changing hands at 7.2462 at midday, 302 pips weaker than the previous late session close and 1.8 per cent softer than the midpoint.

It eventually closed at 7.2494 per US dollar, representing the weakest close since January 14, 2008.

Traders said yuan weakness may persist, reflecting broad US dollar strength in global markets as US Federal Reserve officials showed no signs of backing down from their hawkish rhetoric.
Major Chinese state-owned banks were seen selling US dollars in the onshore foreign exchange market on Friday, four banking sources with direct knowledge of the matter said, in an apparent attempt to stabilise the local currency.

The US dollar selling was aimed at preventing spot yuan from breaching the key 7.25 per US dollar level, the sources said, noting the local unit was weakening towards its daily downside limit.

The state banks’ actions were meant to stabilise the market, one of the sources said. The moves come at a time when China’s Communist Party is holding its 20th party congress.
The sources declined to be identified as they were not authorised to speak on the matter.

On Monday, state banks were also spotted swapping yuan for US dollars in the forwards market and selling those dollars in the spot market, according to sources.

State banks usually trade on behalf of the central bank in China’s foreign exchange market, but they can also trade for their own purposes or execute orders for corporate clients.

Around 90 per cent of the 30 yuan traders who responded to a Bloomberg survey this week forecast the PBOC will ease its tight-ranged fixing after the 20th party congress wraps up on Saturday.

Half said they expect the yuan to be pushed to 7.4 or even 7.5 per US dollar within the year, and only 10 per cent saw it staying at around the current level of about 7.25.
“I think China will allow the depreciation trend to resume and the fixing will climb again soon after the party congress,” said Alvin T. Tan, head of Asia FX strategy at RBC Capital Markets.

Chinese authorities have continued to set firmer-than-expected yuan guidance in a bid to keep the currency stable amid the ongoing 20th party congress, market participants added.

The stronger daily guidance, which allows the onshore yuan to trade in a narrow range of 2 per cent on either side of the midpoint, has effectively capped the downside limit for the yuan, said a trader at a foreign bank.

Friday’s fixing allowed the onshore yuan to trade in a range of 6.9762 to 7.2610, and the midday price was less than 0.2 per cent away from hitting the lower end of the trading band.
“The US$/[offshore yuan]-US$/[onshore yuan] premium could be widening more persistently given the strong fixing bias that caps the onshore,” analysts at Maybank said.
“Such signs of depreciation pressure could also spill over to regional [emerging market foreign exchange],” they said, noting Friday marked the 13th straight session that the PBOC set “almost flat” midpoint guidance.

The offshore yuan, which trades more freely to reflect market expectations, was trading at 7.2640 per US dollar as of midday, 0.25 per cent weaker than its onshore counterpart.

 

[Hakikat ve Hikmet]

Good to fight the inflation in the USA. Fighting against inflation is more important than fighting against Putin....

 

[Abdul Rehman Majeed]

Yuan falls to lowest level against US dollar since 2008 global financial crisis

China’s onshore yuan closed on Friday at the weakest level since the 2008 global financial crisis as the US dollar soared on expectations of more interest rate increases.

www.scmp.com

China’s yuan resumed its weakening trend against the US dollar on Friday, finishing the domestic session at the weakest level since the global financial crisis of 2008 as the US dollar soared on heightened expectations of more interest rate increases.
The yuan gained some support on Thursday after a Bloomberg report that China is considering reducing the coronavirus quarantine time for inbound travellers, citing unidentified sources, though other details were scant.
Prior to the market opening on Friday, the People’s Bank of China (PBOC) set the midpoint rate at 7.1186 per US dollar, 2 pips firmer than the previous fix 7.1188.
In the spot market, the onshore yuan opened at 7.2320 per US dollar and was changing hands at 7.2462 at midday, 302 pips weaker than the previous late session close and 1.8 per cent softer than the midpoint.

It eventually closed at 7.2494 per US dollar, representing the weakest close since January 14, 2008.

Traders said yuan weakness may persist, reflecting broad US dollar strength in global markets as US Federal Reserve officials showed no signs of backing down from their hawkish rhetoric.
Major Chinese state-owned banks were seen selling US dollars in the onshore foreign exchange market on Friday, four banking sources with direct knowledge of the matter said, in an apparent attempt to stabilise the local currency.

The US dollar selling was aimed at preventing spot yuan from breaching the key 7.25 per US dollar level, the sources said, noting the local unit was weakening towards its daily downside limit.

The state banks’ actions were meant to stabilise the market, one of the sources said. The moves come at a time when China’s Communist Party is holding its 20th party congress.
The sources declined to be identified as they were not authorised to speak on the matter.

On Monday, state banks were also spotted swapping yuan for US dollars in the forwards market and selling those dollars in the spot market, according to sources.

State banks usually trade on behalf of the central bank in China’s foreign exchange market, but they can also trade for their own purposes or execute orders for corporate clients.

Around 90 per cent of the 30 yuan traders who responded to a Bloomberg survey this week forecast the PBOC will ease its tight-ranged fixing after the 20th party congress wraps up on Saturday.

Half said they expect the yuan to be pushed to 7.4 or even 7.5 per US dollar within the year, and only 10 per cent saw it staying at around the current level of about 7.25.
“I think China will allow the depreciation trend to resume and the fixing will climb again soon after the party congress,” said Alvin T. Tan, head of Asia FX strategy at RBC Capital Markets.

Chinese authorities have continued to set firmer-than-expected yuan guidance in a bid to keep the currency stable amid the ongoing 20th party congress, market participants added.

The stronger daily guidance, which allows the onshore yuan to trade in a narrow range of 2 per cent on either side of the midpoint, has effectively capped the downside limit for the yuan, said a trader at a foreign bank.

Friday’s fixing allowed the onshore yuan to trade in a range of 6.9762 to 7.2610, and the midday price was less than 0.2 per cent away from hitting the lower end of the trading band.
“The US$/[offshore yuan]-US$/[onshore yuan] premium could be widening more persistently given the strong fixing bias that caps the onshore,” analysts at Maybank said.
“Such signs of depreciation pressure could also spill over to regional [emerging market foreign exchange],” they said, noting Friday marked the 13th straight session that the PBOC set “almost flat” midpoint guidance.

The offshore yuan, which trades more freely to reflect market expectations, was trading at 7.2640 per US dollar as of midday, 0.25 per cent weaker than its onshore counterpart.

More outsourcing of firms and jobs from the US to China.

More export of Chinese goods and services to the US.

 

[Hamartia Antidote]

More outsourcing of firms and jobs from the US to China.

More export of Chinese goods and services to the US.

 

[Menthol]

USA is bankrupt.

So you need to lower your price to make USA keeps above of you, and keep buying your products.

Do you understand this, China?

It seems so.

The Yuan is falling greatly.


USA bankrupt == China bankrupt (and USA suddenly doesn't bankrupt anymore)

 

[REhorror]

Every currency is falling against the US dollar.
Even the VND is now falling, it was 22k/1 USD at the start of the year, now it's 25K/1 USD.

The world must rebel against the USD!

 

[serenity]

lol you dolt. This is part of the US economic collapse. Currency value does not equal strength of economy.

While all currencies are low against USD (because USD is inflating in value), the coming months to two years will see US continue with claimed 8 to 10 percent inflation but reality of inflation is well above 10%. Interest rates continue as is or higher. Dollar climbs, US gold leaves, gold enters China as China offers international arbitrage to take advantage of both higher returns for selling their gold in China for useless USD.

China has the world's largest reserve of USD. They cannot really use it they do not want to dump it suddenly otherwise that's their own USD reducing in value. High USD has the advantage of increasing Chinese exports (highest export value and volume in years) and increasing number of countries looking to switch to trade in other currencies. OPEC beginning to take Yuan for energy products.

High USD means China's USD reserves value are higher. It can buy more using their USD reserves which is increasingly useless to China as it one on hand looks to trade in Yuan with more countries and on another hand wants to slowly spend a large portion of the USD they hold. The high value means China buys more with what it wants to spend off.

High USD means US exports become less competitive relatively and even more trade to buy Chinese products... guess what's happening? US imports from China is higher than ever.

What matters is economic industrial production, ability to form trade partners, maintain them and sell a lot to them, China uses high USD value to buy relatively more from trade partners who want USD. Meanwhile gold is flowing into China at even fast rate than in last 10 years.

Where the gold flows is where the power of the world is seated. Not conspiracy. It moved from Asia and Middle East to Europe throughout the 17th to 20th centuries. Then from Europe to US since WW1. Then from US to China since 1980s right after Bretton Woods and Gold Standard were gone, oil crisis happened, and US set up the petrodollar with Saudi Arabia has major participant.

All the ground foundations of the world are changing. Say USA stronk all you want. Nothing is tested and when the test begins, the truths will become more obvious to all. In the meantime before the test begins, celebrate a high USD all you want... lololol. Keep in mind China has the world's highest USD reserves which it wants to slowly get rid of but doesn't want it to collapse in value otherwise its reserves are even more worthless to China than it has been. Also highest holder of US treasuries and gov debt along with Japan.

US stockmarket unlike China's (a casino for idiot investors) is a good measure of US economic health. All equities and assets are starting to decline and they will for coming years come with a huge reset adjustment in their values.

So thank you for high USD which has allowed China to increase export and earnings, make US exports less competitive relatively, encourage gold arbitrage and allow gold to flow even more into China and out of US and other places, allow China's USD reserves to inflate in value so we can buy more stuff with our USD reserves.

Meanwhile what is important is Yuan against other major trading partner currencies. It must be kept relatively low so that China's exports are competitive.

If Yuan inflates in value to what it should be expected as, China's GDP will multiply but its export competitiveness will go down and China will start importing too much from trade partners. It is in the perfect position.