China Intervenes to Support Yuan

China intervened in the foreign exchange markets in final minutes of trading Wednesday to prevent an excessive fall in the value of the yuan, The Wall Street Journal reported Wednesday.

China first intervened in the currency markets on Tuesday, when it unveiled a commitment to set the yuan’s daily fixings according to the previous day’s closing spot prices and market-moves of other major currencies. The move sent the Chinese currency dropping more than 2 percent to its lowest level against the dollar in nearly four years.

However, sources told the Journal that following further precipitous declines in the yuan on Wednesday, the Peoples Bank of China then told state-owned banks to sell dollars on its behalf in the last 15 minutes of Wednesday’s trading, causing the yuan to jump about 1 percent against the greenback.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam