Decline In Chinese Yuan Suggest Shift In PBOC Policy

The unusually sharp decline in the yuan in the recent days, which has caught many investors off guard, has given rise to speculation that a policy shift is taking place in the mainland.

The currency has depreciated 0.5 percent against the U.S. dollar over the past two weeks. It traded around 6.094 against the greenback on Monday, extending its worst weekly performance in more than two years, after the People’s Bank of China (PBoC) fixed the daily mid-point lower for a fifth straight session.

“Chinese officials have played down the drop in the CNY (traded onshore) and CNH (traded offshore) but nonetheless, markets are seeing it as a major shift in policy following recently weaker economic data,” said Mitul Kotecha, global head of currency strategy and global markets research for Asia at Crédit Agricole.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu