The Chinese yuan is getting hosed, falling to the lowest this year on Wednesday.
The USD/CNH, or the US dollar versus the offshore traded yuan, hit a high of 6.6105 just moments ago, leaving it at the highest level since December 20 last year.
An increase indicates the US dollar is strengthening against the yuan.
The USD/CNH is now up 6% since late March.
Onshore-traded yuan, or CNY, has also been in the wars in early trade on Wednesday with the USD/CNY pushing above the 6.6000 level for the first time this year.
The People’s Bank of China set the midpoint for the USD/CNY’s daily trading range at 6.5669, the highest level since December 25 last year.
The weakness in the yuan follows a solid bounce in the greenback on Tuesday against most major currencies.
Along with escalating trade tensions between the United States and China, the yuan has been under pressure in recent months from a softening in Chinese economic data as well as divergent monetary policy settings between the PBOC and US Federal Reserve.
On Wednesday, China’s state-run tabloid Global Times newspaper said the nation should take “self-defense measures” against US tariffs by offering subsidies to companies and industries that may suffer losses from trade frictions.
It added that China might need to “adjust its policies” to open up its markets “due to economic uncertainty” arising from trade tensions.
The move in the yuan has also led to a steep drop in the Australian and New Zealand dollars, and helped to bolster the Japanese yen as risk aversion begins to lift.
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