China’s yuan extended losses to a new 18-month low in early trade on Monday, breaching a key threshold, as persistent dollar strength and worries over the slowing economy piled more pressure on the currency.
Investors also anxiously awaited April trade data due later in the session to gauge the scope of disruptions from COVID-19 lockdowns.
Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate at 6.6899 per dollar, 567 pips or 0.85 percent weaker than the previous fix of 6.6332, the weakest since November 3, 2020. Similar to last week, the official guidance came in firmer than market projections. Traders and analysts took that as a sign the authorities want to slow the currency’s descent.
Monday’s midpoint fixing was 51 pips stronger than Reuters’ estimate of 6.6950. (BBC)