China fixes the yuan lower for the third straight day

Paul Kane/Getty Images

For a third consecutive session the yuan is weakening against the US dollar.

On Thursday the PBOC fixed the USD/CNY rate at 6.4010, the weakest level seen since August 2011.

It was 0.22% weaker than yesterday’s USD/CNY closing level of 6.387 and 1.11% weaker than Wednesday’s fixing of 6.3306.

After initially strengthening in early trade, the yuan is now continuing to weaken against the US dollar.

The USD/CNY currently sits at 6.4260, up 0.40% from Thursday’s fixing level.

On Tuesday the PBOC announced a change the to the methodology used to determine the yuan’s trading level. Instead of the bank solely determining the rate, it announced that market participants, using the previous days closing level, would now play a greater role in determining the yuan’s initial trading level.

As opposed to Wednesday where the risk assets tanked after the fixing, markets have taken the continued weakening of the yuan in their stride today – so far – with most major currencies strengthening against the US dollar.

Asian stocks are also higher with the Nikkei and ASX 200 up by 0.22% and 0.42% respectively.

All attention now will turn to a press conference from the PBOC scheduled for 12.15pm AEST (10.15am Beijing) related to recent developments in the yuan.

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